Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Contents
Page
Corporate Directory
Chairman’s Report 2020
Review of Operations
Directors’ Report
Remuneration Report - Audited
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cashflows
Notes to Financial Statements
Declaration by Directors
Independent Auditors’ Report
Shareholder Information
3
4
5
8
13
18
19
31
32
33
34
35
68
69
75
Page | 2
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CORPORATE DIRECTORY
Hudson Investment Group Limited
Board of Directors
ACN 004 683 729
ABN 25 004 683 729
Registered and Corporate Office
Level 5
52 Phillip Street
Sydney NSW 2000
Telephone: +61 2 9251 7177
+61 2 9251 7500
Fax:
corporate@higl.com.au
Email:
www.higl.com.au
Website:
Auditors
K.S. Black & Co
Level 1
251 Elizabeth Street
Sydney NSW 2000
Telephone: +61 2 8839 3000
Lawyers
Piper Alderman
Level 23, Governor Macquarie Tower
1 Farrer Place
Sydney NSW 2000
Telephone: +61 2 9253 9999
Bankers
Commonwealth Bank of Australia
Corporate Financial Services
Business & Private Banking
Level 9, Darling Park 1
201 Sussex Street
Sydney NSW 2000
Telephone: +61 2 9118 7031
Australia & New Zealand Banking Group Limited
Level 16, 20 Martin Place
Sydney NSW 2000
Telephone: +61 2 9216 2200
John W Farey (Non-Executive Chairman)
Alan Beasley (Managing Director)
Wei Huang (Executive Director)
John J Foley
Dr Cheng Fong Han
Warren Wen-Shih Choo (Alternate Director)
Joint Company Secretaries
Henry Kinstlinger
Mona Esapournoori
Chief Financial Officer
Francis Choy
Risk & Compliance
Allan Scadden
Share Registry
Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne VIC 3001
Telephone: 1300 850 505 (within Australia)
ASX Code – HGL
Hudson Investment Group Limited shares are listed
on the Australian Securities Exchange.
This financial report covers the Consolidated Entity
consisting of Hudson Investment Group Limited
and its controlled entities.
Hudson Investment Group Limited is a company
limited by shares, incorporated and domiciled in
Australia.
Page | 3
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CHAIRMAN’S REPORT 2020
I present to you the Annual Report for Hudson Investment Group Limited (the Company) for the twelve months
to 31 December 2020. The Company recorded a consolidated net profit of $0.14 million for the year ending 31
December 2020.
With the advent of the Covid-19 pandemic it has been a challenging year for the Company (and the country)
and the economic impact has been immense. However, the Company came through these uncertain times
relatively well.
During the course of the year the Company continued to concentrate on developing its current property
portfolio. The Company’s wholly owned subsidiary Hudson Bowen Hills Pty Ltd has submitted its Development
Application to Economic Development Queensland for its Bowen Hills Properties.
HTH Holdings Pty Ltd has submitted an application to Central Coast Council for a strata title subdivision on the
Western Land, Lots 1 and 74 of the Warnervale Property. Upon completion it will provide more flexibility for
the Company to further develop and add value to its assets.
The focus of the Company is to continually develop its property portfolio to achieve its dual objectives of capital
appreciation and to increase revenue to strengthen it’s strategic positioning for future growth.
On behalf of the Board of Directors, I would like to thank the Company’s management team and staff for their
continued hard work and dedication. Your loyal support and your continuing involvement as shareholders of the
Company are highly valued and appreciated.
John W Farey
Non-Executive Chairman
18 March 2021
Page | 4
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
REVIEW OF OPERATIONS
Hudson Investment Group Limited (the Company) (ASX:HGL) is an ASX-listed company focusing on industrial
residential and commercial property development, and currently owns the following properties:
•
•
•
•
•
171-175 Sparks Road, Halloran, New South Wales
59 Mountain Road, Halloran, New South Wales
(both collectively the Warnervale Properties);
47 Brookes Street, Bowen Hills, Queensland
41-43 Brookes Street, Bowen Hills Queensland
(both collectively the Bowen Hills Properties); and
30% interest in 43 Regent Street, Woolloongabba, Queensland (the Regent Street Property)
Highlights
• HGL wholly owned subsidiary Hudson Bowen Hills Pty Ltd had submitted its Development Application
(DA) to Economic Development Queensland (EDQ) for its Bowen Hills Properties. Urban Strategies Pty
Ltd are continuing discussions with EDQ to progress the DA. HGL anticipates for the DA to be approved
during the first half of 2021.
• Management submitted an application to Central Coast Council for a strata title subdivision on the
Western Land, Lots 1 and 74, which when completed will provide more flexibility in how the Company
further develops and add value to the assets.
• On 19 May 2020, the Company held its Annual General Meeting where the shareholders approved all
resolutions.
• On 22 July 2020, the Company changed its registered office to Level 5, 52 Phillip Street Sydney.
Warnervale Property
a. Overview of location
• Approximately 44.5 hectares of land, the Warnervale Property is situated within the Wyong
Employment Zone and developing Industrial locality of Warnervale on the NSW Central Coast; within
close proximity to the F3 Freeway and within close proximity to developing residential estates in the
Lake Macquarie and Wyong localities.
• Warnervale is predominantly rural/residential locality and is 1 of the 5 major industrial precincts in the
NSW Central Coast and is situated adjacent to the M1 Motorway at the Sparks Road interchange.
The location of the Warnervale properties is ideal for facilitating transport, freight, warehousing,
logistics and manufacturing due to excellent transport links as it is one of a small number of locations
which can accommodate B-Double truck movements.
•
b. Property Investment Information
•
Current zoning of the Warnervale property is part IN1 General Industrial; SP2 Infrastructure and E2
Environmental Conservation
The Company intends to explore development opportunities for the Surplus land.
•
• Valuation of
(a) Western Land
(b) Eastern Land
$24.2 million
$17.9 million
$6.3 million
Page | 5
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Warnervale Western Land – Industrial Warehouse
Warnervale Eastern Land - ponds
Location of Warnervale Properties
Page | 6
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Bowen Hills Properties
•
•
•
The site located is in the Brisbane CBD fringe suburb of Bowen Hills,
approximately 2.4 kilometres north east of the Brisbane General Post
Office.
Land size – approximately 2,025m2
The Company has lodged a DA for a 24-storey mixed use building to
EDQ which is progressing and is anticipated to be approved during the
first half of 2021.
The project includes office space of 14,868sqm and 128 hotel rooms.
Existing gross lease income of approximately $0.42 million
•
•
• Valuation as at 31.12.19 – $10.25m
Regent Street Property
• Development approval received for the construction of 54
apartments over 11 levels.
• During 2020, the Regent Street Property Project had been put on
hold due to the COVID-19 pandemic. The Company will look to
reinstating the Regent Street Project during the first half of 2021. As
such the timeline for construction and completion will be adjusted.
Conceptual Commercial Design
Bowen Hills Conceptual Commercial Design
Regent Street Development Approved Project Design
Outlook for 2021
•
•
•
Plans to further develop our Warnervale properties to unlock greater value.
Proceed with the Regent Street Project in Woolloongabba, Brisbane.
Seek out additional potential property investment opportunities.
Alan Beasley
Managing Director
Page | 7
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
DIRECTORS’ REPORT
Your Directors present their report together with the financial statements on the consolidated entity
(referred to hereafter as the Group) consisting of Hudson Investment Group Limited (the Company) and the
entities it controlled at the end of or during the year ended 31 December 2020.
Principal
activities
The principal activities of the Group during the financial year were investment and
development of properties in Australia.
Operating
results
The consolidated net profit after tax for the financial year ended 31 December 2020 was
$0.14 million compared to a net profit after tax of $3.15 million for the previous
corresponding financial year.
Total Shareholders’ Funds as at 31 December 2020 were $24.9 million (2019: $24.8 million)
and the Net Tangible Asset per share is 42.0 cents (2019:41.78 cents).
Review of
Operations
Information on the operations of the Group and its business strategies and prospects is
disclosed in both the Chairman’s Report and the Review of Operations contained on pages 5
to 7 of this Annual Report.
Dividends
The Directors of the Company do not recommend that any amount be paid by way of
dividend (2019: nil).
Meetings of
Directors
The number of Directors’ Meetings and Directors’ Committee Meetings held, and the
number of these meetings attended by each of the directors of the Company during the
financial year were:
Directors Meetings
Remuneration
Committee Meetings
Audit Committee
Meetings
Director
Attended Held
Attended Held
Attended
Whilst in
Office
7
7
7
7
7
Whilst in
Office
1
1
1
1
1
1
1
1
1
1
7
7
7
7
7
1
1
1
1
1
J Farey
A Beasley
Wei Huang
J Foley
Dr Cheng
Fong Han
Held
Whilst in
Office
1
1
1
1
1
Page | 8
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
INFORMATION ON DIRECTORS AND MANAGEMENT
DIRECTORS
The following persons held office as Directors of the Company at any time during or since the end of the
financial year:
John W Farey
Alan P Beasley
Wei Huang
John J Foley
Dr Cheng Fong Han
Non-Executive Chairman
Managing Director
Executive Director
Non-Executive Director
Non-Executive Director
All Directors have been in office since the commencement of the financial year unless otherwise stated.
John Farey, B. Com, FAIM, FAICD
Non-Executive Chairman - appointed on 1 February 2002
Experience and Expertise
John W Farey has over 45 years’ experience in financial services including
merchant and investment banking.
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Interests in Shares and Options
Nil
Raffles Capital Limited (ASX: RAF)
Chairman of the Board
Member of the Audit Committee
Direct interest in 1,000 shares
Alan Beasley, B.Ec, CPA, FGIA, FAICD
Managing Director - appointed on 19 January 2015
Experience and Expertise
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Interests in Shares and Options
Mr Beasley is a Non-Executive Director and former Director of a number of
publicly listed and unlisted companies. Mr Beasley was educated at the
University of New England (BEc) and Stanford Graduate Business School,
USA.
Epsilon Healthcare Limited (ASX: EPN)
AFT Corporation Limited (ASX: AFT)
Raffles Capital Limited (ASX: RAF)
E3SIXTY Ltd (ASX: E3S)
Managing Director
Member of the Audit Committee
Direct interest in 160,000 shares.
Wei Huang, B.Ec, MComm
Executive Director - appointed on 4 June 2019
Experience and Expertise
Wei Huang graduated with Bachelor of Economics from Macquarie
University and a Master of Commerce from the University of New South
Wales. He is a member of CPA Australia and has experience in financial
control, new business start-ups and development within the textile, retail,
financial services, construction and mining sectors
in Australia and
internationally.
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Member of the Audit Committee
Interests in Shares and Options
Indirect interest in 6,000,000 shares
Page | 9
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
John Foley BD., LL.B., B.L. (Dub), KHS., F.A.I.C.D.
Non-Executive Director - appointed on 6 August 2014
Experience and Expertise
Mr Foley has wide-ranging experience
manufacturing, legal, financial and investment related industries.
His commercial and legal background provides knowledge and experience to
the Company.
Citigold Corporation Limited
resources,
industrial,
in
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Nil
Member of Audit Committee
Chair of the Remuneration Committee
Interests in Shares and Options
Nil
Dr Cheng Fong Han BSc. PhD.
Non-Executive Director - appointed on 1 June 2017
Experience and Expertise
Dr Han is the current Executive Chairman of Hua Xia International
Investments Ltd. He has previously held appointments as Group CEO and
Managing Director of Fraser and Neave Limited and DBS Land Limited,
Deputy Managing Director of Petrochemical Corporation of Singapore,
and Chairman of Australand Holdings Ltd (1996-2000). Dr Han has also
served as Permanent Secretary to the Ministry of Manpower (Singapore)
(1978-1984).
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Nil
Nil
Member of the Audit Committee
Interests in Shares and Options
Nil
Mr Warren Wen-Shih Choo BSc.
Alternate Director to Dr Cheng Fong Han – appointed on 1 June 2017
Experience and Expertise
Mr Choo currently serves as Assistant General Manager of Tridex Pte
Ltd. Mr Choo has a background in engineering.
Other Current Directorships of
Listed Companies
Former Directorships in the Last
Three Years of Listed Companies
Special Responsibilities
Interests in Shares and Options
Nil
Nil
Nil
Nil
Page | 10
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
MANAGEMENT
Henry Kinstlinger
Joint Company Secretary – Appointed 16 March 2016
Experience and Expertise
Henry Kinstlinger has, for the past thirty years, been actively involved in
the financial and corporate management in several public companies
and non-governmental organisations. He is currently the Company
Secretary of Australian Bauxite Limited. He is a corporate consultant
with broad experience in investor and community relations and
corporate and statutory compliance.
Mona Esapournoori
Joint Company Secretary – appointed 5 June 2018
Experience and Expertise
Mona Esapournoori holds a Bachelor of Law from Western Sydney
University. She is admitted as a solicitor with the Law Society of New South
Wales.
Francis Choy MCom MBA FCPA (HK) FCPA CA
Chief Financial Officer
Experience and Expertise
Francis Choy has held a number of senior positions in corporate
financial management roles throughout Australia and South East Asia.
He has extensive experience
in project finance, compliance,
acquisition and investment appraisals.
He has been involved in project finance, financial management of
property development and telecommunication projects in South East
Asia.
He held senior financial roles for numerous public listed companies
both in Hong Kong and Australia.
LIKELY DEVELOPMENTS
Information on likely developments in the operations of the Group, known at the date of this report has been
covered generally within the report. In the opinion of the Directors providing further information would
prejudice the interests of the Group.
RISK MANAGEMENT
The Board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that
activities are aligned with the risks and opportunities identified by the Board.
The Company believes that it is crucial for all Board members to be a part of this process, and as such the Board
has not established a separate risk management committee.
The Board has a number of mechanisms in place to ensure that management’s objectives and activities are
aligned with the risks identified by the Board. These include the following:
• Board approval of a strategic plan, which encompasses strategy statements designed to meet
•
stakeholders’ needs and manage business risk.
Implementation of Board approved operating plans and budgets and Board monitoring of progress
against these budgets.
LITIGATION
Halloran Properties 1 Pty Ltd (Halloran Properties), a wholly owned subsidiary of Hudson Investment Group
Limited commenced proceedings in the Supreme Court of NSW for the return of the deposit of $675,000 paid
for Lot 3, which is located at 143 Sparks Road, Warnervale. The defendants to these proceedings have filed a
crossclaim against Halloran Properties 1 Pty Ltd.
Page | 11
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
MATTERS SUBSEQUENT TO BALANCE DATE
At the date of this report there are no other matters or circumstances that have arisen since 31 December 2020
that have significantly affected or may significantly affect:
•
•
•
The operations, in financial years subsequent to 31 December 2020 of the Group;
The results of those operations; or
The state of affairs, in financial years subsequent to 31 December 2020 of the Group.
ENVIRONMENTAL REGULATIONS
There has been no breach of environmental regulations during the financial year or in the period subsequent to
the end of the financial year and up to the date of this report.
The Company aims to ensure that the highest standard of environmental care is achieved, and that it complies
with all relevant environmental legislation. The Directors are mindful of the regulatory regime in relation to the
impact of the Company’s activities on the environment.
To the best of the Directors’ knowledge, the Group has adequate systems in place to ensure compliance with the
requirements of all environmental legislation described above and is not aware of any breach of those
requirements during the financial year and up to the date of the Directors’ Report.
Page | 12
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
REMUNERATION REPORT - AUDITED
The information provided in this Remuneration Report has been audited as required by Section 308 (3c) of the
Corporations Act 2001.
This report outlines the remuneration arrangements in place for Directors and Executives of the Company.
REMUNERATION COMMITTEE
The Remuneration Committee reviews and approves policy for determining Executives’ remuneration and any
amendments to that policy.
The whole board sits as the Remuneration Committee which makes recommendations to the Board on the
remuneration of Executive Directors (including base salary, incentive payments, equity awards and service
contracts) and remuneration issues for Non-Executive Directors.
The Committee meets as often as required but not less than once per year.
The Committee met during the period and the Committee members attendance record is disclosed in the table
of Directors Meetings shown on page 8.
Options granted to directors and key management personnel do not have performance conditions. As such the
Group does not have a policy for directors and key management personnel removing the “at risk” aspect of
options granted to them as part of their remuneration.
DIRECTORS’ AND OTHER KEY MANAGEMENT PERSONNEL REMUNERATION
The following persons were Directors of the Company during the financial year unless otherwise stated:
•
John W Farey
• Alan P Beasley
• Wei Huang
•
John J Foley
• Dr Cheng Fong Han
• Warren Wen-Shih Choo
Non-Executive Chairman
Managing Director
Executive Director
Non-Executive Director
Non-Executive Director
Alternate Director
The following persons were other key management personnel of Hudson Investment Group Limited during the
financial year:
• Henry Kinstlinger
• Mona Esapournoori
•
Francis Choy
Joint Company Secretary
Joint Company Secretary
Chief Financial Officer
Executives’ remuneration and other terms of employment are reviewed annually having regard to relevant
comparative information and independent expert advice. As well as basic salary, remuneration packages include
superannuation. Directors are also able to participate in an Employee Share Plan.
Remuneration packages are set at levels that are intended to attract and retain executives capable of managing
the Group’s operations. Consideration is also given to reasonableness, acceptability to shareholders and
appropriateness for the current level of operations.
Remuneration of Non-Executive Directors is determined by the Board based on recommendations from the
Remuneration Committee and the maximum amount approved by shareholders from time to time.
PERFORMANCE CONDITIONS
The elements of remuneration as detailed within the Remuneration Report are dependent on the satisfaction of
the individual’s performance and Hudson Investment Group’s financial performance.
The Board undertakes an annual review of its performance and the performance of the Board Committees.
Details of the nature and amount of each element of the remuneration of each Director of the Company and
each specified executive of the Company are set out in the following tables. The remuneration amounts are the
same for the Company and the Group.
Page | 13
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Directors and Other Key Management Personnel of Hudson Investment Group Limited
Short Term Employee Benefits
Salary and
other fees
Non-Monetary
Benefits
Post-Employment
Benefits
Superannuation
Long Term
Benefits
Long Service
Leave
$
$
Consolidated
2020
Directors
Alan P Beasley
John W Farey
Wei Huang
John J Foley
Dr Cheng Fong Han
150,000
12,000
150,000
-
-
Director - Total
312,000
Henry Kinstlinger
Mona Esapournoori
Francis Choy
KMP - Total
2019
Directors
Alan P Beasley
John W Farey
Wei Huang
John J Foley
Dr Cheng Fong Han
Director - Total
KMP
Henry Kinstlinger
Mona Esapournoori
Francis Choy
KMP - Total
-
-
50,000
50,000
210,000
22,000
127,500
-
-
359,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
$
-
-
-
-
-
-
-
-
150,000
12,000
150,000
-
-
312,000
-
-
55,413
55,413
210,000
22,000
127,500
-
-
359,500
-
-
-
-
$
-
-
-
-
-
-
-
-
4,750
4,750
663
663
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The amounts reported represent the total remuneration paid by entities in the Group in relation to managing
the affairs of all the entities within the Group. The remuneration has not been allocated between the individual
entities within the Group as this would not be practicable.
There are no performance conditions related to any of the above payments.
There is no other element of Directors and other Key Management Personnel remuneration.
Page | 14
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
EXECUTIVE SERVICE AGREEMENTS
There was one service agreement in place formalising the terms of remuneration of Mr Beasley. The agreement
has no specific term, remunerated in $150,000 p.a and may be terminated by either party upon reasonable
notice. The Company may terminate the agreement in the event of serious misconduct by either party without
any compensatory payment.
There was one service agreement in place formalising the terms of remuneration of Mr Choy. The agreement
has no specific term, remunerated in $120,000 p.a and may be terminated by either party upon reasonable
notice. The Company may terminate the agreement in the event of serious misconduct by either party without
any compensatory payment.
CORPORATE SERVICE AGREEMENTS
The Company has entered into a Corporate Service Agreement with Hudson Asset Management Pty Limited
pursuant to which Hudson Asset Management Pty Limited has agreed to provide its management, registered
office, administrative, accounting CFO and secretarial services.
The term of the Corporate Services Agreement has no fixed expiry term and the fee payable is that amount
agreed between the parties from time to time. The monthly corporate services fee was agreed and reduced from
$20,000 p.m to $10,000 p.m; the CFO services was paid to Mr Choy directly. The terms of the Corporate Services
Agreement provide that Hudson Asset Management Pty Limited shall act in accordance with the directions of
the Board.
SHARE OPTIONS GRANTED TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
There were no options granted during or since the end of the financial year to any of the Directors or other Key
Management Personnel of the Company and the Group as part of their remuneration. At the date of this report
there were no unissued shares under option to Directors or other Key Management Personnel of the Company.
End of Remuneration Report
Page | 15
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
DIRECTORS’ INTEREST
The relevant interest of each Director in the share capital of the Company as shown in the Register of Directors’
Shareholdings as at the date of this report is:
Directors’ Interest in shares and options of the Company and related bodies corporate
Ordinary Shares (Number)
Direct
Interest
Employee
Share Plan
Indirect
Interest
Total
Director
John Farey
Alan Beasley
Wei Huang
John J Foley
Dr Cheng Fong Han
1,000
160,000
-
-
-
-
-
-
-
-
-
-
6,000,000
-
-
1,000
160,000
6,000,000
-
-
Please refer to Note 24 of the financial statements for details.
SHARES UNDER OPTION
No options over issued shares or interests in the Company were granted during or since the end of the financial
year and there were no options outstanding at the date of this report.
LOANS TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL
No loans were made to Directors or specified Executives of the Company and the Group under the Employee
Share Plan during the financial year. Please refer to Note 24 for details.
DIRECTORS’ AND OFFICERS’ INDEMNITIES AND INSURANCE
During the financial year the Company paid an insurance premium, insuring the Company’s Directors, (as named
in this report), Company Secretary, Executive officers and employees against liabilities not prohibited from
insurance by the Corporations Act 2001.
A confidentiality clause in the insurance contract prohibits disclosure of the amount of the premium and the
nature of insured liabilities.
PROCEEDINGS ON BEHALF OF THE COMPANY
Other than the matter referred to in the Directors’ Report no person has applied to the Court under Section 237
of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any
proceedings to which the Company is a party for the purposes of taking responsibility on behalf of the Company
for all or part of those proceedings.
No proceedings have been brought or intervened in or on behalf of the Company with leave of the Court under
Section 237 of the Corporations Act 2001.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities & Investments
Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the Directors’ Report
have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases,
to the nearest dollar.
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration as required under Section 307C of the Corporations Act 2001 has been
received and is set out on page 18.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Group are important.
Details of the amounts paid or payable to the auditor K.S. Black & Co for audit and non-audit services provided
during the year are set out below.
Page | 16
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
The Board of Directors has considered the position and, in accordance with advice received from the audit
committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not
compromise the auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
•
•
all non-audit services have been reviewed by the audit committee to ensure they do not impact the
impartiality and objectivity of the auditor.
none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
AUDITOR’S REMUNERATION
During the year the following fees were paid or payable for services provided by the Auditor of the parent
entity, its related practices and non-related audit firms:
Consolidated
2020
$
2019
$
Audit services:
Amounts paid or payable to auditors for audit and review of
the financial report for the entity or any entity in the Group
Audit and review services fees
26,295
25,620
Taxation and other advisory services:
Amounts paid or payable to the Auditor for non-audit
taxation services for the entity or any entity in the Group
Taxation services
Advisory services
Total
AUDITOR
2,895
-
29,190
4,665
-
30,285
K.S. Black & Co continues in office in accordance with Section 327 of the Corporations Act 2001.
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a Resolution of the
Board of Directors.
Wei Huang
Executive Director
Signed at Sydney
18 March 2021
Alan Beasley
Managing Director
Page | 17
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
AUDITOR’S INDEPENDENCE DECLARATION
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CORPORATE GOVERNANCE STATEMENT
Corporate Governance Plan
The Company has adopted this Corporate Governance Plan, which forms the basis of a comprehensive system
of control and accountability for the administration of corporate governance. The Board is committed to
administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate
governance commensurate with the Company’s needs.
To the extent they are applicable to the Company, the Board has adopted the ASX Corporate Governance
Council’s Corporate Governance Principles and Recommendations 4th Edition (“Principles and
Recommendations”).
In light of the Company’s size and nature, the Board considers that the current board is a cost effective and
practical method of directing and managing the Company. As the Company’s activities develop in size and
scope, the size of the board and the implementation of additional corporate governance policies and structures
will be reviewed.
a)
Board Responsibilities
The Board is responsible for corporate governance of the Company. The Board develops strategies for
the Company, reviews strategic objectives and monitors performance against those objectives. The goals
of the corporate governance processes are to:
1. maintain and increase Shareholder value;
2. ensure a prudential and ethical basis for the Company's conduct and activities;
3. ensure compliance with the Company's legal and regulatory objectives consistent with these
goals, and to achieve this the Board assumes the following responsibilities:
4. developing initiatives for profit and asset growth;
i.
ii.
iii.
reviewing the corporate, commercial and financial performance of the Company on a
regular basis;
acting on behalf of, and being accountable to, the Shareholders; and
identifying business risks and implementing actions to manage those risks and
corporate systems to assure quality.
The Company is committed to the circulating of relevant materials to Directors in a timely manner to
facilitate Directors' participation in the Board discussions on a fully-informed basis.
b)
Composition of the Board
Election of Board members is substantially the province of the Shareholders in general meeting.
However, subject thereto, the Company is committed to the following principles:
1.
2.
the Board is to comprise persons with a blend of skills, experience and attributes appropriate
for the Company and its businesses; and
the principal criteria for the appointment of new Directors are their ability to add value to the
Company and its business. All incumbent Directors bring an independent judgement to bear
in deliberations and the current representation is considered adequate given the stage of the
Company's development. The names, qualifications and relevant experience of each Director
will be set out in the Annual Reports of the Company.
c)
Code of Conduct
As part of its commitment to recognising the legitimate expectations of stakeholders and promoting
practices necessary to maintain confidence in the Company's integrity, the Company has an established
Code of Conduct (the Code) to guide compliance with legal, ethical and other obligations to legitimate
stakeholders and the responsibility and accountability required of the Company's personnel for
reporting and investigating unethical practices or circumstances where there are breaches of the Code.
These stakeholders include employees, clients, customers, government authorities, creditors and the
community as a whole. This Code governs all of the Company's commercial operations and the conduct
of Directors, employees, consultants, contractors an all other people when they represent the Company.
This Code also governs the responsibility and accountability required of the Company's personnel for
reporting and investigating unethical practices.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
The Board, management and all employees of the Company are committed to implementing this Code
and each individual is accountable for such compliance. A copy of the Code is given to all employees,
contractors and relevant personnel, including directors.
d) Diversity Policy
The Board has adopted a diversity policy which provides a framework for the Company to achieve, among
other things, a diverse and skilled workforce, a workplace culture characterised by inclusive practices and
behaviours for the benefit of all staff, improved employment and career development opportunities for
women and a work environment that values and utilises the contributions of employees with diverse
backgrounds, experiences and perspectives.
e) Continuous Disclosure
The Board has adopted a diversity policy which provides a framework for the Company to achieve, among
other things, a diverse and skilled workforce, a workplace culture characterised by inclusive practices and
behaviours for the benefit of all staff, improved employment and career development opportunities for
women and a work environment that values and utilises the contributions of employees with diverse
backgrounds, experiences and perspectives.
f) Whistle-blower policy
HGL is committed to the highest standards of conduct and ethical behaviour in all of our business
activities, and to promoting and supporting a culture of honest and ethical behaviour, corporate
compliance and good corporate governance.
HGL encourages the reporting of any instances of suspected unethical, illegal, fraudulent or undesirable
conduct involving HGL's businesses, and will ensure that those persons who make a report shall do so
without fear of intimidation, disadvantage or reprisal.
g) Anti-bribery and corruption policy
HGL has zero tolerance for bribery and corruption and are committed to identifying and preventing
bribery and corruption. Any breach will be treated seriously and may result in disciplinary action, dismissal
or termination of contract.
h) Audit Committee and Management of Risk
The Board has established an Audit and Risk Committee comprised of the full board. The Company is not
of a size that justifies having a separate committee to oversee risk, so matters typically considered by such
a committee are dealt with by the full Board.
The Board has established an Audit and Risk Committee Charter governing the Audit and Risk Committee
which is available on the Company's website (under "Corporate Governance").
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
i) Remuneration Arrangements
The Board will decide the remuneration of an executive Director, without the affected executive Director
participating in that decision-making process.
The constitution of the Company provides that Directors are entitled to remuneration as the Directors
determine, but the remuneration of the non-executive Directors must not exceed, in aggregate, a
maximum amount fixed by the Company in general meeting of Shareholders for that purpose. This
amount has been set at $200,000.
A Director may be paid fees or other amounts (subject to any necessary Shareholder approval) (for
example, non-cash performance incentives such as Options) as determined by the Board where a Director
performs special duties or otherwise performs services outside the scope of the ordinary duties of a
Director.
Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them
respectively in or about the performance of their duties as Directors. The Board reviews and approves the
remuneration policy to enable the Company to attract and retain executives and Directors who will create
value for Shareholders having consideration to the amount considered to be commensurate for a
company of its size and level of activity as well as the relevant Directors' time, commitment and
responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans
including the appropriateness of performance hurdles and total payments proposed.
j) Shareholder Communications
The Board strives to ensure that Shareholders are provided with sufficient information to assess the
performance of the Company and its Directors and to make well-informed investment decisions.
Information is communicated to Shareholders through:
1. annual and half-yearly financial reports and quarterly reports;
2. annual and other general meetings convened for Shareholder review and approval of Board
proposals;
3. continuous disclosure of material changes to ASX for open access to the public; and
4.
the Company maintains a website where all ASX announcements, notices and financial reports
are published as soon as possible after release to ASX.
The auditor is invited to attend the annual general meeting of Shareholders. The Chairman will
permit Shareholders to ask questions about the conduct of the audit and the preparation and
content of the audit report.
k) Trading in HGL Shares
The Company's Share Trading Policy prohibits Directors from taking advantage of their position or
information acquired, in the course of their duties, and the misuse of information for personal gain or to
cause detriment to the Company.
Directors, senior executives and employees are required to advise the Company Secretary of their
intentions prior to undertaking any transaction in the Company's securities.
If an employee, officer or director is considered to possess material non-public information, they will be
precluded from making a security transaction until after the time of public release of that information.
A copy of the Company's Share Trading Policy is available on the Company's website (under “Corporate
Governance”).
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
l) Corporate Social Responsibility
The Company is committed to conducting its operations and activities in harmony with the environment
and society, and wherever practicable to work in collaboration with communities and government
institutions in decision-making and activities for effective, efficient and sustainable solutions.
A copy of the Company's Environmental and Social Charter is available on the Company's website
(under "Corporate Governance").
m) Departures from Recommendations
The Company is required to report any departures from the recommendations in its annual financial
report.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations
PRINCIPLE
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Recommendation 1.1
Response
The entity should have and disclose a charter, which
sets out the the respective roles and responsibilities
of the board, the Chair and management; and
includes a description of those matters expressly
reserved to the board and those delegated to
management
Recommendation 1.2
The entity should undertake appropriate checks
before appointing a person or putting forward to
security holders a candidate for election, as a
director.
The entity should provide security holders with all
material information in its possession relevant to a
decision on whether or not to elect or re-elect a
director.
Recommendation 1.3
The entity should have a written agreement with each
director and senior executive setting out the terms of
their appointment.
Recommendation 1.4
The company secretary of the entity should be
accountable directly to the board, through the chair,
on all matters to do with the proper functioning of
the board.
Recommendation 1.5
The entity should establish a policy concerning
diversity and disclose the policy or a summary of that
policy. The policy should include requirements for the
board to establish measurable objectives for
achieving gender diversity for the board to assess
annually both the objectives and the progress in
achieving them.
The entity should disclose in its annual report the
measurable objectives for achieving gender diversity
set by the board in accordance with the diversity policy
and its progress towards achieving them.
Complies.
The Company’s Corporate Governance Plan includes a
Board Charter, which discloses
specific
responsibilities of the Board. The responsibilities
delegated to the senior management team are set out
in the Board Charter.
the
The Board Charter can be viewed at the Company’s
website http://www.higl.com.au
Complies.
The Company has conducted appropriate checks for
all current Directors.
The Company will undertake appropriate checks
described in Guidance Note 1, paragraph 3.15 issued
by the ASX before appointing a person, or putting
forward to Shareholders a candidate for election, as a
Director.
Complies.
Complies.
The Joint Company Secretaries have been appointed
and are accountable directly to the Board, through
the Chairperson, on all matters to do with the proper
functioning of the Board.
Complies.
The Board has established a Diversity Policy.
The Diversity Policy is disclosed on the Company’s
website.
The entity should disclose in its annual report the
proportion of women employees in the whole
organisation, women in senior executive positions
and women on the board.
Details of the Company’s measurable objectives for
achieving gender diversity and its progress towards
achieving them and the entity’s gender diversity
figures are set out in the Company’s annual report.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 1.6
The entity should have and disclose a process for
periodically evaluating the performance of the board,
its committees and individual directors and disclose,
in relation to each reporting period, whether a
performance evaluation was undertaken in the
reporting period in accordance with that process.
Recommendation 1.7
The entity should have and disclose a process for
periodically evaluating the performance of its senior
executives; and disclose, in relation to each reporting
period, whether a performance evaluation was
undertaken in the reporting period in accordance
with that process
PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
Recommendation 2.1
The entity’s board should have a nomination
committee which has at least three members, a
majority of whom are independent directors; and is
chaired by an independent director.
The entity should disclose the charter of the
committee, the members of the committee; and as at
the end of each reporting period, the number of
times the committee met throughout the period and
the individual attendances of the members at those
meetings.
If the entity does not have a nomination committee,
it should disclose that fact and the processes it
employs to address board succession issues and to
ensure that the board has the appropriate balance of
skills, knowledge, experience, independence and
diversity to enable it to discharge its duties and
responsibilities effectively.
Recommendation 2.2
The entity should have and disclose a board skills
matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its
membership.
Will comply.
The Company will disclose the process for evaluating
the performance of the Board, its committees and
individual directors in its future annual reports.
Details of the performance evaluations undertaken
will be set out in future annual reports.
Complies.
Senior executive key performance indicators are set
annually, with performance appraised by the Board,
and reviewed in detail by the Board.
The internal review is to be conducted on an annual
basis and if deemed necessary an independent third
party will facilitate this internal review.
Details of the performance evaluations undertaken
will be set out in future annual reports.
Does not comply.
The Company does not have a nomination committee
Currently the role of the nomination committee is
undertaken by the full Board. The Company intends
to establish a nomination committee once the
Company’s operations are of sufficient magnitude.
The Company does not have a nomination
committee. The Board evaluates the skills,
experience of its members and then determines
whether additional members should be invited to the
Board to complement or replace the existing
members.
Does not yet comply.
The Company intends to develop a board skill matrix
setting out the mix of skills and diversity the Board
has and requires. The skill matrix will be available at
the Company’s website once finalised.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 2.3
The entity should disclose the names of the directors
considered by the board to be independent directors
and the length of service of each director.
The entity should disclose if a director has an interest,
position, association or relationship of the type
described in Box 2.3 of the ASX Corporate
Governance Principles and Recommendation (3rd
edition) but the board is of the opinion that it does
not compromise the independence of the director,
the nature of the interest, position, association or
relationship in question and an explanation of why
the board is of that opinion
Recommendation 2.4
Complies.
John Farey, John Foley and Dr Cheng Fong Han are
the independent directors.
The independence of the directors and length of
service of each director are set out in the Company’s
annual report.
Details of any relevant interest, position, association
or relationship impacting upon a director’s
independence are set out in the Company’s annual
report.
A majority of the board of the entity should be
independent directors.
Complies
Recommendation 2.5
The chair of the board of the entity should be an
independent director and, in particular, should not be
the same person as the CEO / Managing Director of
the entity.
Recommendation 2.6
The entity should have a program for inducting new
directors and provide appropriate professional
development opportunities for directors to develop
and maintain the skills and knowledge needed to
perform their role as directors effectively.
The Company has five directors. Three of these
directors are independent directors.
Complies
The Chairman is independent and is not the Managing
Director. The Company does have a separate
CEO/managing director.
Does not yet comply.
Currently the induction of new directors and plan for
professional development is managed informally by
the full Board.
The Company intends to develop a formal program
for inducting new directors and providing appropriate
professional development opportunities consistent
with the development of the Company.
PRINCIPLE 3: ACT ETHICALLY AND RESPONSIBLY
Recommendation 3.1
The entity should establish articulate and disclose its
values
Complies.
The Board has a Code of Conduct to guide compliance
with legal, ethical and other obligations to legitimate
stakeholders and the responsibility and accountability
required of the Group’s personnel for reporting and
investigating unethical practices or circumstances
where there are beaches of the Code.
The Code of Conduct is available on the Company’s
website.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 3.2
A listed entity should:
(a) have and disclose a code of conduct for its
directors, senior executives and employees; and
(b) ensure that the board or a committee of the board
is informed of any material breaches of that code by a
director or senior executive; and
(2) any other material breaches of that code that call
into question the culture of the organisation.
Recommendation 3.3
A listed entity should have and disclose a
whistleblower policy and ensure that the board or a
committee of the board is informed of any material
incidents reported under that policy.
Recommendation 3.4
A listed entity should have and disclose an anti-
bribery and corruption policy and ensure that the
board or committee of the board is informed of any
material breaches of that policy.
Complies.
The Company’s Corporate Governance Plan includes a
Code of Conduct, which discloses the specific
responsibility and accountability of HGL directors,
senior executives and employees
The Code of Conduct can be viewed at the Company’s
website http://www.higl.com.au
Complies.
The Company’s Corporate Governance Plan includes a
whistleblower policy, which encourages promoting
and supporting a culture of honest and ethical
behaviour, corporate compliance and good corporate
governance.
The whistleblower policy can be viewed at the
Company’s website http://www.higl.com.au
Complies.
The Company’s Corporate Governance Plan includes a
anti-bribery and corruption policy, which outlines the
Company’s commitment to comply with the laws and
regulations and acting in an ethical manner,
consistent with the principles of honesty, integrity,
fairness and respect.
The anti-bribery and corruption policy can be viewed
at the Company’s website http://www.higl.com.au
PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
Recommendation 4.1
The board of the entity should have an audit
committee, which consists only of non-executive
directors, a majority of which are independent
directors and is chaired by an independent chair that
is not the chair of the board.
The entity should disclose the charter of the
committee, the members of the committee and as at
the end of each reporting period, the number of
times the committee met throughout the period and
the individual attendances of the members at those
meetings.
Partially complies.
The board has established an audit and risk
committee Charter.
Members of the committee comprise the whole
board of directors who have appropriate and relevant
financial experience to act in this capacity.
A summary of the charter and details of the number
of times the audit and risk committee met throughout
the period and the individual attendances of the
members at those meetings are set out in the
Company’s annual report.
The full audit and risk committee charter is available
on the Company’s website
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 4.2
The board should disclose whether it has, before
approving the entity’s financial statements for the
financial period receive assurance from its Chief
Executive Officer (or equivalent) and the Chief
Financial Officer (or equivalent) a declaration that the
financial records of the entity have been properly
maintained and that the financial statements comply
with the appropriate accounting standards and give a
true and fair view of the financial position and
performance of the entity and that the opinion has
been formed on the basis of a sound system of risk
management and internal control which is operating
effectively in all material respects in relation to
financial reporting risks.
Recommendation 4.3
A listed entity should disclose its process to verify the
integrity of any periodic corporate report it releases
to the market that is not audited or reviewed by an
external auditor.
Complies.
The Board requires the Managing Director and Chief
Financial Officer to provide such a statement before
approving the entity’s financial statements for a
financial period.
Complies.
The Company goes through external auditor approval
for its corporate reports. External auditor attends
AGMs and is available to answer questions from
Security Holders relevant to the audit.
PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1
The entity should establish written policies designed
to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at senior
executive level for that compliance and disclose those
policies or a summary of those policies.
Complies.
The Company has a written policy on information
disclosure. The focus of these policies and procedures
is continuous disclosure and improving access to
information for investors.
The Company’s continuous disclosure policy can be
viewed at the Company’s website.
Recommendation 5.2
A listed entity should ensure that its board receives
copies of all material market announcements
promptly after they have been made.
Recommendation 5.3
A listed entity that gives a new and substantive
investor or analyst presentation should release a copy
of the presentation materials on the ASX Market
Announcements Platform ahead of the presentation.
PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS
Complies.
Complies.
Recommendation 6.1
The entity should provide information about itself
and its governance to investors via its website.
Complies.
The Company has provided specific information about
itself and its key personnel and has developed a
comprehensive Corporate Governance Plan.
Details can be found at the Company’s website.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 6.2
The entity should design and implement an investor
relations program to facilitate effective two-way
communication with investors.
Recommendation 6.3
The entity should disclose the policies and processes
it has in place to facilitate and encourage
participation at meetings of security holders.
Recommendation 6.4
A listed entity should ensure that all substantive
resolutions at a meeting of security holders are
decided by a poll rather than by a show of hands.
Complies.
The Company has established a Shareholder’s
Communication Policy. The Company recognises the
importance of forthright communications and aims to
ensure that the shareholders are informed of all
major developments affecting the Company.
Details of the Shareholder’s Communication Policy
can be found on the Company’s website.
Complies.
The Shareholder’s Communication Policy is available
on the Company’s website and details are set out in
the Company’s annual report.
Will comply at the next relevant meeting
Recommendation 6.5
A listed entity should give security holders the option
to receive communications from, and send
communications to, the entity and its security registry
electronically.
Complies.
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
Recommendation 7.1
The board of a listed entity should have a committee
or committees to oversee risk, each of which has at
least three members, a majority of whom are
independent directors and is chaired by an
independent director.
The entity should disclose the charter of the
committee, the members of the committee and at
the end of each reporting period, the number of
times the committee met throughout the period and
the individual attendances of the members at those
meetings.
Complies.
The Board has established an audit and risk
committee to oversee risk which is comprised of the
whole Board.
Complies
The Company’s charter for the audit and risk
committee is available at the Company’s website and
the details of the number of times the committee met
and the individual attendances is set out in the
Company’s annual report.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 7.2
The board or board committee should review the
entity’s risk management framework at least annually
to satisfy itself that it continues to be sound, to
determine whether there have been any changes in
the material business risk the entity faces and to
ensure that they remain with the risk appetite set by
the board.
The entity should also disclose in relation to each
reporting period, whether such a review has taken
place
Recommendation 7.3
The entity should disclose if it has an internal audit
function, how the function is structured and what
role it performs. If the entity does not have an
internal audit function, the entity should disclose that
fact and the processes it employs for evaluating and
continually improving the effectiveness of its risk
management and internal control processes.
Complies.
The Company’s Corporate Governance Plan includes a
Risk Management Review Procedure and Compliance
and Control policy.
The Board determines the Company’s “risk profile”
and is responsible for overseeing and approving risk
management strategy and policies, internal
compliance and internal control.
The Board has delegated to the audit and risk
committee the responsibility for implementing the
risk management system.
Details of the number of times the committee
conducted a risk management review in relation to
each reporting period will be disclosed in its annual
reports.
Does not yet comply.
The Board has delegated the internal audit function
to the audit and risk committee and intends to
establish and implement the structure and role of the
internal audit function.
The Company will disclose the details of the internal
audit function in its future annual reports.
Recommendation 7.4
The entity should disclose whether it has any material
exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or
intends to manage those risks.
Complies.
The Company has an Audit and Risk committee
appointed to manage economic sustainability and
risk.
PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
Recommendation 8.1
The board should establish a remuneration
committee which has at least three members, a
majority of whom are independent directors and is
chaired by an independent director.
If the entity does not have a remuneration
committee, the entity should disclose that fact and
the processes it employs for setting the level and
composition of remuneration for directors and senior
executives and ensuring that such remuneration is
appropriate and not excessive.
Does not yet comply due to the size of the Company.
The entire board undertakes the functions normally
delegated to a Remuneration Committee.
The Board has adopted a Remuneration Committee
Charter.
However, the Company is not of a size that justifies
having a separate Remuneration Committee so
matters typically considered by such a committee are
dealt with by the full Board.
The Board has reviewed, through independent
sources, the level and composition of remuneration
for Directors and senior executives to ensure that
such remuneration is appropriate and not excessive.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
Recommendation 8.2
The entity should separately disclose its policies and
practices regarding the remuneration of non-
executive directors and the remuneration of
executive directors and other senior executives.
Recommendation 8.3
If the entity has an equity-based remuneration
scheme it should have a policy on whether
participants are permitted to enter into transactions
(whether through the use of derivatives or otherwise)
which limit the economic risk of participating in the
scheme; and disclose that policy or a summary of it.
Complies.
The Company distinguishes the structure of Non-
executive Directors’ remuneration from Executive
Directors and senior executives.
Details of the policies and practices regarding
remuneration are set out in the Company’s annual
report.
The Remuneration Committee Charter is disclosed on
the Company’s website.
Complies.
The Company’s Share Trading Policy prohibits
executive staff from undertaking hedging or other
strategies that could limit the economic risk
associated with Company Securities issued under any
equity-based remuneration scheme.
The Share Trading Policy can be viewed on the
Company’s website
PRINCIPLE 9: ADDITIONAL RECOMMENDATIONS THAT APPLY ONLY IN CERTAIN CASES
Recommendation 9.1
A listed entity with a director who does not speak the
language in which board or security holder meetings
are held or key corporate documents are written
should disclose the processes it has in place to ensure
the director understands and can contribute to the
discussions at those meetings and understands and
can discharge their obligations in relation to those
documents.
Recommendation 9.2
A listed entity established outside Australia should
ensure that meetings of security holders are held at a
reasonable place and time.
Recommendation 9.3
A listed entity established outside Australia, and an
externally managed listed entity that has an AGM,
should ensure that its external auditor attends its
AGM and is available to answer questions from
security holders relevant to the audit.
We do not have a director in this position and
therefore this recommendation is not applicable.
We do not have a director in this position and
therefore this recommendation is not applicable.
We do not have a director in this position and
therefore this recommendation is not applicable.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2020
Revenue
Cost of services
Other income and expenses
Cost of providing services and administration expenses
Finance income
Finance expenses
PROFIT/(LOSS) BEFORE INCOME TAX
Income tax
PROFIT/(LOSS) AFTER TAX
OTHER COMPREHENSIVE INCOME
Other comprehensive income
Tax expenses
Other comprehensive income after tax
Total comprehensive income
Profit attributable to non-controlling interests
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO
MEMBERS OF THE PARENT ENTITY
Earnings per shares
Basic earnings per share (cents)
Diluted earnings per share (cents)
Consolidated
2020
$’000
2019
$’000
1,712
(398)
(61)
(843)
93
(354)
149
-
149
-
-
-
149
-
149
Cents
0.25
0.25
1,660
(457)
3,067
(735)
33
(418)
3,150
-
3,150
-
-
-
3,150
-
3,150
Cents
5.31
5.31
Notes
4
5
6a
6b
6c
7
17
17
The above Statement should be read in conjunction with the accompanying notes.
Page | 31
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investment properties
Investment
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Accrued payable and provision
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Financial liabilities
Accrued payable and provision
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued Capital
Reserves
Accumulated losses
Total equity attributable to equity holders of the parent entity
Non-controlling interest
TOTAL EQUITY
Consolidated
2020
$’000
2019
$’000
Notes
8
9
11
12
10
13
14
14
15
16
16
186
111
64
361
34,181
2,411
2
36,594
36,955
346
11,524
91
11,961
-
42
42
12,003
24,952
63,397
5,626
(44,071)
24,952
-
24,952
245
52
120
417
33,843
2,082
2
35,927
36,344
181
-
10
191
11,350
-
11,350
11,541
24,803
63,397
5,626
(44,220)
24,803
-
24,803
The above Statement should be read in conjunction with the accompanying notes.
Page | 32
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2020
Consolidated
Notes
Balance at 1 January 2020
Share issued
Share issuing costs
Profit for the year
Balance at 31 December 2020
Balance at 1 January 2019
Share issued
Share issuing costs
Profit for the year
Balance at 31 December 2019
15
15
15
Issued
Capital
$’000
63,397
-
-
-
63,397
53,094
10,325
(22)
-
63,397
Reserves
Accumulated
Losses
Total Equity
$’000
5,626
-
-
-
5,626
5,626
-
-
-
5,626
$’000
(44,220)
-
-
149
(44,071)
(47,370)
-
-
3,150
(44,220)
$’000
24,803
-
-
149
24,952
11,350
10,325
(22)
3,150
24,803
The above Statement should be read in conjunction with the accompanying notes.
Page | 33
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
Notes
Consolidated
2020
$’000
2019
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers, employees and service providers
Interest received
Interest paid
Net cash provided by/(used in) operating activities
19
Cash flows from investing activities
Payments for investment properties improvements
Payments for purchases of investments
Payments for property, plant and equipment
Payment for deposit
Net cash (used in)/ provided by investing activities
Cash flows from financing activities
Proceeds from issuing share
Share issuing cost
Issued /(retired) convertible notes
Bank borrowings
Net cash provided by /(used in) financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
8
1,636
(880)
1
(352)
405
(338)
(240)
-
(60)
(638)
-
-
-
174
174
(59)
245
186
1,609
(1,146)
11
(371)
103
(451)
(2,060)
(10,630)
-
(13,141)
10,325
(22)
(520)
3,350
13,133
95
150
245
The above Statement should be read in conjunction with the accompanying notes.
Page | 34
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
1.
CORPORATE INFORMATION
The consolidated financial statements and notes of the Company for the year ended 31 December 2020
were authorised for issue in accordance with a resolution of the directors and covers Hudson
Investment Group Limited (the Company) as the parent entity as well as the group consisting of Hudson
Investment Group Limited and its subsidiaries as required by the Corporations Act 2001 (the Group).
The consolidated financial statements and notes are presented in Australian currency.
Hudson Investment Group Limited is a company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Securities Exchange.
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a.
Basis of preparation
This general-purpose financial report has been prepared in accordance with Australian Accounting
Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accountancy Standards Board and the Corporations Act 2001.
Statement of Compliance
Australian Accounting Standards ('AASBs') include Australian equivalents to International
Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report
of Hudson Investment Group Limited also complies with International Financial Reporting
Standards.
Critical accounting estimates and judgements
Details of critical accounting estimates and assumptions about the future made by management
at reporting date are set out below:
–
Impairment of assets
The Company assesses impairment at each reporting date by evaluating conditions specific
to the Group that may lead to impairment of assets. Where an impairment trigger exists,
the recoverable amount of the asset is determined. Calculations performed in assessing
recoverable amounts incorporate a number of key estimates.
Critical judgements
Management have made the following judgements when applying the Group's accounting
policies:
– Recognition of deferred tax assets
In line with the Group’s accounting policy (Note 2f) and as disclosed in Note 7, deferred
tax assets have not been recognised.
Going Concern
This financial report has been prepared on a going concern basis, which contemplates the
continuity of business activities and the realisation of assets and payments of liabilities in the
normal course of business.
The directors believe the Company will be able to pay its debts as and when they fall due and to
fund near term anticipated activities.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
Historical cost convention
These financial statements have been prepared on an accruals basis and are based on the historical
cost convention except for where noted in these accounting policies.
Material accounting policies adopted in the preparation of these financial statements are presented
below and have been consistently applied unless otherwise stated.
ASIC Class Order 98/100
The Company is of a kind referred to in ASIC Class Order 98/100, issued by the Australian Securities
and Investments Commission, relating to the 'rounding off' of amounts in the financial report.
Amounts in the financial report have been rounded off in accordance with that Class Order to the
nearest thousand dollars, or in certain cases, the nearest dollar.
b.
Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Hudson Investment Group Limited (“the parent entity”) as at the reporting date and the results of all
subsidiaries for the year then ended. Hudson Investment Group Limited and its subsidiaries together
are referred to in this financial report as the Group.
Subsidiaries are all those entities over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from the entity’s activities, generally accompanying a
shareholding of more than one-half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the Group
controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date that control ceases. The financial performance of those entities is
included only for the period of the year that they were controlled.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the
Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
Minority interests in the results and equity of subsidiaries are shown separately in the consolidated
Statement of Profit or Loss and Other Comprehensive Income and Statement of Financial Position
respectively.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Hudson
Investment Group Limited.
c.
Segment reporting
A business segment is a group of assets and operations engaged in providing products or services that
are subject to risks and returns that are different to those of other business segments. A geographical
segment is engaged in providing products or services within a particular economic environment and
is subject to risks and returns that are different from those of segments operating in other economic
environments. Reporting to management by segments is on this basis.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
d.
Foreign currency transactions and balances
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using
the currency of the primary economic environment in which the entity operates (‘the
functional currency’). The financial statements are presented in Australian dollars, which is
Hudson Investment Group Limited’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign currencies are recognised in the
Statement of Profit or Loss and Other Comprehensive Income.
(iii) Group companies
The results and financial position of all the Group entities that have a functional currency
different from the presentation currency are translated into the presentation currency as
follows:
•
•
•
•
assets and liabilities for each Statement of Financial Position presented are
translated at the closing rate at the date of that Statement of Financial Position;
income and expenses for each Statement of Profit or Loss and Other
Comprehensive Income are translated at average exchange rates (unless this is
not a reasonable approximation of the cumulative effect of the rates prevailing
on the transaction dates, in which case income and expenses are translated at
the dates of the transactions);
retained earnings are translated at the exchange rates prevailing at the date of
transactions; and
all resulting exchange differences are recognised as a separate component of
equity.
On consolidation, exchange differences arising from the translation of any net investment
in foreign entities, and of borrowings and other currency instruments designated as
hedges of such investments, are taken to shareholders’ equity. When a foreign operation
is sold, or borrowings repaid a proportionate share of such exchange differences are
recognised in the Statement of Profit or Loss and Other Comprehensive Income as part of
the gain or loss on the sale where applicable.
e. Revenue recognition
Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed
as revenue are net of returns, trade allowances and duties and taxes paid. The following specific
recognition criteria must also be met before revenue is recognised:
Sale of Goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership
have passed to the buyer and can be reliably measured. Risks and rewards are considered passed
to buyer when goods have been delivered to the customer.
Interest
Interest revenue is recognised as it accrues taking into account the effective yield on the financial
asset.
Rental Income
Rental income on investment properties is accounted for on a straight-line basis over the lease
term. Contingent rentals are recognised as income in the periods when they are earned.
All revenue is stated net of the amount of goods and services tax (GST).
Page | 37
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
f.
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s
taxable income based on the income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates
expected to apply when the assets are recovered or liabilities are settled, based on those tax rates
which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative
amounts of deductible and taxable temporary differences to measure the deferred tax asset or
liability. An exception is made for certain temporary differences arising from the initial recognition
of an asset or a liability. No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a business combination, that at
the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the
carrying amount and tax bases of investments in controlled entities where the parent entity is
able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
The Company and its wholly owned entities are part of a tax-consolidated group under Australian
taxation law. Hudson Investment Group Limited is the head entity in the tax-consolidated group.
Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary
differences of the members of the tax-consolidated group are recognised in the separate financial
statements of the members of the tax-consolidated group using the ‘separate taxpayer within
group’ approach. Current tax liabilities and assets and deferred tax assets arising from unused tax
losses and tax credits of the members of the tax-consolidated group are recognised by the
Company (as head entity in the tax-consolidated group).
The amounts receivable/payable under tax funding arrangements are due upon notification by
the entity which is issued soon after the end of each financial year. Interim funding notices may
also be issued by the head entity to its wholly owned subsidiaries. These amounts are recognised
as current inter-company receivables or payables.
g. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part
of receivables or payables in the Statement of Financial Position.
Cash flows are included in Statement of Cash Flows on a gross basis except for the GST component
of cash flows arising from investing and financing activities, which is recoverable from, or payable
to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payable to, the taxation authority.
Page | 38
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
h.
Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash includes cash and cash equivalents on hand
and at call deposits with banks or financial institutions, investment in money market instruments
maturing within less than 3 months, net of bank overdrafts.
i.
Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost,
less provision for doubtful debts. Trade receivables are due for settlement no more than 60 days from
the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off. A provision for doubtful receivables is established when there is
objective evidence that entities in the Group will not be able to collect all amounts due according to
the original terms of receivables.
j.
Inventories
Inventories include raw materials, work in progress and finished goods.
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials,
direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating capacity. Costs are assigned to individual items of
inventory on the basis of weighted average costs. Net realisable value is the estimated selling price
in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale.
k.
Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash
generating units).
Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment
at each reporting period.
l.
Financial instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions to the instrument. For financial assets, this is equivalent to the date that the
company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is
adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are
expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the
effective interest rate method, or cost. Fair value represents the amount for which an asset could be
exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted
prices in an active market are used to determine fair value. In other circumstances, valuation
techniques are adopted.
Page | 39
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
Amortised cost is calculated as:
(a) the amount at which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially
recognised and the maturity amount calculated using the effective interest method; and
(d) less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the
relevant period and is equivalent to the rate that exactly discounts estimated future cash
payments or receipts (including fees, transaction costs and other premiums or discounts)
through the expected life (or when this cannot be reliably predicted, the contractual term) of
the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value
with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities
as being subject to the requirements of accounting standards specifically applicable to financial
instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held
for trading for the purpose of short-term profit taking, derivatives not held for hedging
purposes, or when they are designated as such to avoid an accounting mismatch or to
enable performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently measured at fair value
with changes in carrying value being included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and are subsequently measured at
amortised cost.
Loans and receivables are included in current assets, except for those which are not
expected to mature within 12 months after reporting date. (All other loans and receivables
are classified as non-current assets.)
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities
and fixed or determinable payments, and it is the Group’s intention to hold these
investments to maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those which
are expected to mature within 12 months after reporting date. (All other investments are
classified as current assets.)
If during the period the Group sold or reclassified more than an insignificant amount of the
held-to-maturity investments before maturity, the entire held-to-maturity investments
category would be tainted and reclassified as available-for-sale.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not
suitable to be classified into other categories of financial assets due to their nature, or they
are designated as such by management. They comprise investments in the equity of other
entities where there is neither a fixed maturity nor fixed or determinable payments.
Available-for-sale financial assets are included in non-current assets, except for those
which are expected to be disposed of within 12 months after reporting date. (All other
financial assets are classified as current assets.)
(v) Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently
measured at amortised cost.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques
are applied to determine the fair value for all unlisted securities, including recent arm’s length
transactions, reference to similar instruments and option pricing models.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a
financial instrument has been impaired. In the case of available-for-sale financial instruments, a
prolonged decline in the value of the instrument is considered to determine whether impairment has
arisen. Impairment losses are recognised in the statement of comprehensive income.
De-recognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the
asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised
where the related obligations are discharged, cancelled or expired. The difference between the
carrying value of the financial liability extinguished or transferred to another party and the fair value
of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in
profit or loss.
m. Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and
measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets is based on quoted market prices at
the Statement of Financial Position date. The quoted market price used for financial assets held by
entities in the Group is the current bid price; the appropriate quoted market price for financial
liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques. Entities in the Group use a variety of methods and make assumptions that are
based on market conditions existing at each balance date. Quoted market prices or dealer quotes for
similar instruments are used for long-term debt instruments held. Other techniques, such as
estimated discounted cash flows, are used to determine fair value for the remaining financial
instruments.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed
to approximate their fair values. The fair value of financial liabilities for disclosure purposes is
estimated by discounting the future contractual cash flows at the current market interest rate that is
available to entities in the Group for similar financial instruments.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
n.
Property, plant and equipment
Land and buildings are shown at fair value, based on periodic valuations by external independent
valuers, less subsequent depreciation for buildings. Any accumulated depreciation at the date of
revaluation is eliminated against the gross carrying amount of the asset and the net amount is
restated to the re-valued amount of the asset. All other plant and equipment is stated at historical
cost less depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the Statement of Comprehensive Income during the financial period in which they are
incurred.
Increases in the carrying amounts arising on revaluation of land and buildings are credited to the asset
revaluation reserve in equity. A revaluation surplus is credited to the asset revaluation reserve
included within shareholder’s equity unless it reverses a revaluation decrease on the same asset
previously recognised in the Statement of Profit or Loss and Other Comprehensive Income. A
revaluation deficit is recognised in the Statement of Profit or Loss and Other Comprehensive Income
unless it directly offsets a previous revaluation surplus on the same asset in the asset revaluation
reserve. On disposal, any revaluation reserve relating to sold assets is transferred to retained
earnings. Independent valuations are performed regularly to ensure the carrying amounts of land
and buildings do not differ materially from the fair value at the Statement of Financial Position date.
Land is not depreciated. Depreciation on other assets is calculated using the straight line, over their
estimated useful lives, as follows:
Plant and equipment
•
• Buildings
10 years (depreciation rate 10%)
20 years (depreciation rate 5%)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
Statement of Financial Position date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount (note 2 (m)).
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These
are included in the Statement of Profit or Loss and Other Comprehensive Income.
o.
Investment property
Investment property is held for long-term rental yields and is not occupied by the Group. Investment
property is carried at fair value, which is based on active market prices, adjusted, if necessary, for any
difference in the nature, location or condition of the specific asset. If this information is not available,
the Group uses alternative valuation methods such as recent prices in less active markets or
discounted cash flow projections. These valuations are reviewed annually. Changes in fair values are
recorded in the Statement of Profit or Loss and Other Comprehensive Income as part of other income.
p.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
q.
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and the outflow can
be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at
the end of the reporting period.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
r. Other liabilities
Other liabilities comprise non-current amounts due to related parties that do not bear interest and
are repayable within one year of Statement of Financial Position date.
s.
Employee benefits
Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
settled within one year of Statement of Financial Position date are recognised in other liabilities in
respect of employees' services rendered up to Statement of Financial Position date and are measured
at amounts expected to be paid when the liabilities are settled.
Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured
as the present value of expected future payments to be made in respect of services provided by
employees up to the reporting date.
In determining the liability, consideration is given to employee wage increases and the probability
that the employee may satisfy resting requirements. Those cash flows are discounted using market
yields on national government bonds with terms to maturity that match the expected timing of cash
flows.
t.
Issued capital
Ordinary shares are classified as equity.
Costs directly attributable to the issue of new shares or options are shown as a deduction from the
equity proceeds, net of any income tax benefit.
u.
Share-based payments
Ownership-based remuneration is provided to employees via an employee share option plan and
employee share plan.
Share-based compensation is recognised as an expense in respect of the services received,
measured on a fair value basis.
The fair value of the options at grant date is independently determined using a Black Scholes option
pricing model that takes into account the exercise price, the term of the option, the vesting and
performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-market vesting conditions are included in
assumptions about the number of options that are expected to become exercisable. At each
Statement of Financial Position date, the Group revises its estimate of the number of options that
are expected to become exercisable. The employee benefit expense recognised each period takes
into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to those
options is transferred to share capital.
v.
Earnings per share (EPS)
Basic EPS is calculated as net profit attributable to members, adjusted to exclude costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted
for any bonus element.
Diluted EPS is calculated as net profit attributable to members, adjusted for costs of servicing equity
(other than dividends), the after tax effect of dividends and interest associated with dilutive
potential ordinary shares that have been recognised as expenses; and other non-discretionary
changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
2.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES continued
w. New Accounting Standards for Application
The AASB has issued new and amended accounting standards and interpretations that have
mandatory application dates for future reporting periods. The group has decided against early
adoption of these standards. We have reviewed these standards and interpretations and there are
none having any material effect.
Page | 44
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
3.
FINANCIAL RISK MANAGEMENT
a.
General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note.
The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for
designing and operating processes that ensure the effective implementation of the objectives and
policies to the Group’s finance function. The Groups' risk management policies and objectives are
therefore designed to minimise the potential impacts of these risks on the results of the Group where
such impacts may be material. The Board receives reports from the Chief Financial Officer through
which it reviews the effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets. The Group’s finance function also reviews the risk management
policies and processes and report their findings to the Audit Committee.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility.
Further details regarding these policies are set out below.
The Group and the parent entity hold the following financial instruments:
Financial assets
Current
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Current
Trade and other payables
Financial liabilities
Non-current
Financial liabilities
Consolidated
2020
$’000
2019
$’000
186
111
297
346
11,524
-
11,870
245
52
297
181
-
11,350
11,531
Page | 45
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
3.
FINANCIAL RISK MANAGEMENT continued
b.
Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation
resulting in the Group incurring a financial loss. This usually occurs when debtors or counterparties
to derivative contracts fail to settle their obligations owing to the Group excluding the available for
sale financial assets.
The maximum exposure to credit risk at balance date is the carrying amount of the financial assets,
excluding the available for sale financial assets, as summarised under note(a) above.
For banks and financial institutions, only independently rated parties are accepted and each deposit
account is kept to under $1 million to ensure that it is covered by the Governments bank deposit
guarantee scheme.
The maximum exposure to credit risk at balance date by country is as follows:
Australia
c.
Liquidity risk
Consolidated
2020
$’000
207
207
2019
$’000
52
52
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet commitments
associated with financial instruments that is, borrowing repayments. Bank loans are detailed below.
The funds were provided by bankers for the Group and the Parent Company. It is the policy of the
Board of Directors that treasury reviews and maintains adequate committed credit facilities and the
ability to close-out market positions.
Maturity Analysis of financial assets
Consolidated
2020
Current
Cash and cash
equivalent
Trade and other
receivables
Total financial assets
2019
Current
Cash and cash
equivalent
Trade and other
receivables
Total financial assets
Carrying
Amount
$'000
Contractual
Cash flows
$'000
< 6 mths
6- 12
mths
1-3 years > 3 years
$'000
$'000
$'000
$'000
186
111
297
245
52
297
186
111
297
245
52
297
186
-
186
245
-
245
-
111
111
-
52
52
-
-
-
-
-
-
-
-
-
-
-
-
Page | 46
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
3.
FINANCIAL RISK MANAGEMENT continued
Maturity Analysis of financial liabilities
Consolidated
2020
Current
Trade and other
payables
Financial liabilities
Non-current
Financial Liabilities
Total financial liabilities
at amortised cost
2019
Current
Trade and other
payables
Non-current
Financial Liabilities
Total financial liabilities
at amortised cost
Carrying
Amount
$'000
Contractual
Cash flows
$'000
< 6 mths
$'000
6- 12
mths
$'000
1-3 years
> 3 years
$'000
$'000
346
346
210
136
11,524
11,524
3,402
8,122
-
-
-
-
11,870
11,870
3,612
8,258
181
181
181
11,350
11,350
-
11,531
11,531
181
-
-
-
-
-
-
-
-
11,350
11,350
-
-
-
-
-
-
-
Page | 47
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
3.
FINANCIAL RISK MANAGEMENT continued
d.
Market risk
Market risk arises from the use of interest bearing, tradable and foreign currency financial
instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or other
market factors (other price risk).
(i)
Interest rate risk
The Group does not apply hedge accounting.
The Group is constantly monitoring its exposure to trends and fluctuations in interest rates in
order to manage interest rate risk.
For further details of exposure to interest rate risk refer Note 14 Financial Liabilities.
Sensitivity Analysis
The following tables demonstrate the sensitivity to reasonably possible changes in interest
rates, with all other variables held constant, of the Group’s profit after tax (through the impact
on floating rate borrowings). There is no impact on the Group’s equity.
Consolidated
2020
Financial Liabilities
Tax charge of 26%
After tax increase/(decrease)
2019
Financial Liabilities
Tax charge of 27.5%
After tax increase/(decrease)
(ii) Currency risk
Carrying
Amount
$'000
11,524
11,524
11,350
-
11,350
+1%
Interest
Rate
$'000
-1%
Interest
Rate
$'000
(115)
30
(85)
(114)
31
(83)
115
(30)
85
114
(31)
83
The Group’s policy is, where possible, to allow group entities to settle liabilities denominated in
their functional currency (AUD) with the cash generated from their own operations in that
currency. Where group entities have liabilities denominated in a currency other than their
functional currency (and have insufficient reserves of that currency to settle them) cash already
denominated in that currency will, where possible, be transferred from elsewhere within the
Group.
In order to monitor the continuing effectiveness of this policy, the Group receives forecast,
analysed by the major currencies held by the Group, of liabilities due for settlement and
expected cash reserve.
There is no foreign currency loan as at reporting date (2019: Nil).
Page | 48
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
3.
FINANCIAL RISK MANAGEMENT continued
Capital risk management
In managing its capital, the Group’s primary objectives are to pay dividends and maintain liquidity.
These objectives dictate any adjustments to capital structure. Rather than set policies, advice is
taken from professional advisors as to how to achieve these objectives. There has been no change
in either of these objectives, or what is considered capital in the year.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistently with others in the industry, the Group and the parent entity monitor capital on the
basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is
calculated as total borrowings (including 'Financial liabilities' and 'trade and other payables' as
shown in the Statement of Financial Position) less cash and cash equivalents. Total capital is
calculated as 'equity' as shown in the Statement of Financial Position (including minority interest)
plus net debt.
It is the Group’s policy to maintain its gearing ratio at a healthy and manageable level. The Group’s
gearing ratio at the Statement of Financial Position date is as follows:
Gearing ratios
Total borrowings
Less: cash and cash equivalents
Net borrowings
Total equity
Total capital – equity and borrowings
Gearing Ratio
Consolidated
2020
$'000
11,524
(186)
11,338
24,952
36,290
2019
$'000
11,350
(245)
11,105
24,803
35,908
31%
31%
There have been no other significant changes to the Group’s capital management objectives,
policies and processes in the year nor has there been any change in what the Group considers to
be its capital.
Page | 49
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
4.
REVENUE
Rental Income
Fee Income
5.
OTHER INCOME AND EXPENSES
Change in fair value of investment properties
Doubtful debt provision and others
6.
EXPENSES
The profit/(loss) before income tax is arrived after
(charging)/crediting the following specific amounts:
a.
b.
c.
Cost of providing services and administration expenses
Consulting and professional expenses
Director and Employee on costs
Legal expenses
Other administration expenses
Finance income
Interest received
Finance expenses
Interest paid – bank loan
Interest paid – Others
Others
Consolidated
2020
$’000
1,579
133
1,712
Consolidated
2020
$’000
-
(61)
(61)
2019
$’000
1,531
129
1,660
2019
$’000
3,039
28
3,067
Consolidated
2020
2019
$’000
(116)
(350)
(83)
(294)
(843)
$’000
(118)
(202)
(44)
(371)
(735)
93
33
(352)
-
(2)
(354)
(385)
(8)
(25)
(418)
Page | 50
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
7.
INCOME TAX
a.
Income tax expense
Income tax expense
Current tax expense
Deferred tax expense
Total income tax expense/(benefit)
Deferred tax expense
Increase in deferred tax expense/(benefit)
b.
Numerical reconciliation of income tax to prima facie tax
payable
Profit/(loss) from continuing operations before income tax
expense
Income tax expense (benefit) calculated @ 26% (2019:27.5%)
Deferred tax expenses relating to partly owned subsidiaries
outside of the tax consolidated group
Temporary differences not brought to account
Recoupment of prior year tax losses not previously brought to
account
Income tax expense/(benefit) at effective tax rate of 26%
(2019: 27.5%)
c.
Amounts recognised directly in equity
Aggregate current and deferred tax arising during the
reporting period and not recognised in profit and loss but
directly debited or credited to equity:
Current income tax
Current income tax on transaction costs of issuing equity
instruments
Consolidated
2020
$’000
2019
$’000
-
-
-
-
149
39
6
(45)
-
-
-
-
-
3,150
866
(864)
(2)
-
-
-
-
-
Page | 51
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
7.
INCOME TAX continued
d.
Unrecognised deferred tax assets and liabilities
The unrecognised deferred tax assets of the Group include
$3,799,185 (2019: $3,971,185) in relation to carried
forward tax losses and $6,013,210 (2019: $6,013,210) in
relation to carried forward capital losses.
Deferred tax assets and liabilities have not been
recognised in the statement of financial position for the
following items:
Prior year unrecognised tax losses now ineligible due to
change in tax consolidation group
Other deductible temporary differences/permanent
differences and tax losses
Potential benefit/(expense) at 26% (2019: 27.5%)
e.
Deferred tax assets
Deferred tax assets comprise temporary differences
attributable to:
Amounts recognised in profit and loss
Tax losses
Amounts recognised directly in equity
Share issue expenses
f.
Deferred tax liabilities
Deferred tax liabilities comprise temporary differences
attributable to:
Amounts recognised directly in equity
Revaluations of land and buildings
Amounts recognised in profit and loss
Capitalised development costs
Consolidated
2020
$’000
2019
$’000
-
24
24
6
-
-
-
-
-
-
-
(3,142)
(3,142)
(864)
-
-
-
-
-
-
Page | 52
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
8.
CASH & CASH EQUIVALENTS
Cash at bank and on hand
Cash held in trust accounts
Consolidated
2020
$’000
136
50
2019
$’000
195
50
186
245
Weighted average interest rates
0.00%
0.00%
9.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables (note a)
Less: Provision for doubtful debts
Deposit
Other receivables (note b)
a.
Trade receivables past due but not impaired
Up to 3 months
3 to 6 months
b.
Other receivables
Consolidated
2020
$’000
87
(74)
13
120
(22)
111
2019
$’000
10
-
10
-
42
52
Consolidated
2020
$’000
(92)
179
87
2019
$’000
21
48
69
These amounts relate to receivables for GST and deposit paid.
c.
Advances to controlled entities
There are no advances to controlled entities that are past due but not impaired as measurement is
tied to recoverability. The advances are non-interest bearing and with no securities.
d.
Fair value and credit risk
Current trade and other receivables
Due to the short-term nature of these receivables their carrying amount is assumed to approximate
their fair value.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of
receivables mentioned above.
Page | 53
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
10. OTHER ASSETS
Non-Current
Development cost - investment in acquiring one property
and related costs
Provision for diminution in value
Consolidated
2020
$’000
2019
$’000
1,387
(1,385)
2
1,387
(1,385)
2
11. OTHER CURRENT ASSETS
Consolidated
Prepayments
Others
2020
$’000
60
4
64
2019
$’000
120
-
120
Page | 54
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
12.
INVESTMENT PROPERTIES
Non-current
Investment properties at fair value
a.
Valuation basis
Consolidated
2020
$'000
34,181
34,181
2019
$'000
33,843
33,843
The basis of the valuation of investment properties is fair value being the amounts for which the
properties could be exchanged between willing parties in an arm’s length transaction, based on
current prices in an active market for similar properties in the same location and condition and
subject to similar leases. The revaluations were based on a combination of independent
assessments made by a member of the Australian Property Institute and directors’ valuations.
Investment properties at fair value
Independent valuation
Capital works and improvements
Accumulated depreciation and impairment
Consolidated
2020
$'000
34,475
338
(632)
34,181
2019
$'000
34,475
-
(632)
33,843
b.
Reconciliation
A reconciliation of the carrying amount of investment properties at the beginning and end of the current
financial year is set out below:
At fair value
Balance at beginning of year
Acquisition of land and building
Capital Works and improvement
Change in fair value
Carrying amount at end of the year
Consolidated
2020
$'000
2019
$'000
33,843
-
338
-
34,181
19,723
10,630
451
3,039
33,843
c.
Amounts recognised in Statement of Profit or Loss and Other Comprehensive Income for investment
properties
Rental and services income
Property running expenses
d. Non-current assets pledged as security
Consolidated
2020
$'000
1,579
2019
$'000
1,531
398
457
Refer to Note 14 for information on non-current assets pledged as security by the parent entity or its
controlled entities.
Page | 55
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
13.
TRADE AND OTHER PAYABLES
Current
Unsecured
Trade and other creditors
Other payables
14.
FINANCIAL LIABILITIES
Current
Secured
Lease and hire purchase liabilities
Bank loan
Total Current
Non-Current
Secured
Lease and hire purchase liabilities
Bank loan
Total Non-Current
Security for borrowings
Consolidated
2020
$'000
2019
$'000
200
146
346
161
20
181
Consolidated
2020
$’000
-
11,524
11,524
2019
$’000
-
-
-
-
-
-
-
11,350
11,350
Bank loan is secured by first mortgages over the Group’s land and properties and fixed charges over assets
of the Group. The loans are repayable in 2021. The interest rate is fixed at 2.6% (2019: 4.11%).
The facilities are subject to an annual review and compliance of financial covenants.
Assets pledged as security
The carrying amounts of non-current assets pledged as security are:
Land and Investment Properties
Consolidated
2020
$’000
34,181
34,181
2019
$’000
33,843
33,843
The fair value of borrowings is equivalent to the carrying amounts of loans liabilities.
Risk exposure
Information about the Group’s exposure to interest rate changes is provided in Note 3.
Page | 56
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
15.
ISSUED CAPITAL
Share capital
Ordinary shares
a. Movement during the year
Consolidated and
Parent Entity
2020
Shares
Number
2019
Shares
Number
Consolidated and
Parent Entity
2020
2019
$’000
$’000
59,359,935
59,359,935
63,397
63,397
Balance at beginning of the year
Share issued
Share consolidation 10 to 1
Share issuing cost
Balance at the end of the year
59,359,935
-
-
59,359,935
298,598,683
295,000,000
(534,238,748)
-
59,359,935
63,397
-
-
63,397
53,094
10,325
-
(22)
63,397
b.
Terms and conditions
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the
parent entity in proportion to the number of and amounts paid on the shares held. On a show of hands
every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote.
c. Options
There are no unissued ordinary shares of the Company under option at the date of this report.
d. Performance Options
No options were granted and issued during this year.
Page | 57
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
16.
RESERVES AND ACCUMULATED LOSSES
a.
Reserves
Asset revaluation reserve
Capital reserve
Foreign currency translation reserve
Movements in reserves
Asset revaluation reserve
Balance at start of period
Business combination movement
Balance at the end of period
Capital Profits Reserve
Balance at start of period
Business combination movement
Balance at the end of period
Foreign currency translation reserve
Balance at start of period
Currency translation differences
Balance at the end of period
Consolidated
2020
$’000
2019
$’000
1,141
5,751
(1,266)
5,626
1,141
5,751
(1,266)
5,626
1,141
-
1,141
5,751
-
5,751
1,141
-
1,141
5,751
-
5,751
(1,266)
-
(1,266)
(1,266)
-
(1,266)
The asset revaluation reserve records increments and decrements on the revaluation of individual
parcels of land and buildings. The balance standing to the credit of the reserve may be used to satisfy
the distribution of bonus shares to shareholders and is only available for the payment of cash dividends
in limited circumstances as permitted by law, net of capital gains tax payable.
The foreign currency translation reserve is used to record exchange differences on translation of
foreign controlled subsidiaries. The reserve is recognised in the Statement of Profit or Loss and Other
Comprehensive Income when the investment is disposed of.
b.
Accumulated losses
Balance at the beginning of the year
Profit for the year
Balance at the end of the year
Consolidated
2020
$’000
2019
$’000
(44,220)
149
(47,370)
3,150
(44,071)
(44,220)
Page | 58
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
17.
EARNINGS / (LOSS) PER SHARE
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
Profit/(Loss) used in calculating basic and diluted earnings/(loss) per
share
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
2020
Cents
0.25
0.25
2020
$’000
149
2019
Cents
5.31
5.31
2019
$’000
3,150
2020
Shares
2019
Shares
59,359,935
59,359,935
Adjustments for calculation of diluted earnings per share
-
-
Weighted average number of ordinary shares used as the
denominator in calculating diluted earnings per share.
59,359,935
59,359,935
18.
OPERATING SEGMENTS
The Consolidated Entity’s primary reporting format is business segments and its secondary reporting format
is geographical segments.
Business segments
The Consolidated entity is organised into the following divisions by product and service type.
Property investment & development
Development and administration of industrial property in eastern Australia.
Geographical segments
All business segments operate principally within Australia.
Accounting policies
Segment revenues and expenses are those directly attributable to the segments and include any joint
revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used
by a segment and consist principally of cash, receivables, inventories, intangibles and property, plant and
equipment, net of allowances and accumulated depreciation and amortisation. While most assets can be
directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more
segments is allocated to segments on a reasonable basis. Segment liabilities consist principally of payables,
employee benefits, accrued expenses, provisions and borrowings.
Inter-segment transfers
Segment revenues, expenses and results include transfers between segments. All other intersegment
transfers are priced on an “arm’s-length” basis and are eliminated on consolidation.
Page | 59
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
18. OPERATING SEGMENTS continued
Primary reporting – business segments
Property
investment &
development
Investment
Services
Intersegment
eliminations/
unallocated
Consolidated
2020
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Total segment revenue
Segment result
Profit/(loss) before tax
Tax expense
Net profit/(loss)
Segment assets
Segment liabilities
Acquisition of non-current
assets
Depreciation and amortisation
expense
2019
Sales to external customers
Intersegment sales
Total sales revenue
Other revenue
Total segment revenue
Segment result
Profit/(loss) before income tax
expense
-
Net profit/(loss)
Segment assets
Segment liabilities
Acquisition of non-current
assets
Depreciation and amortisation
expense
$’000
$’000
120
-
120
-
120
-
-
-
2,411
-
240
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$’000
1,712
-
1,712
-
1,712
149
-
149
36,955
12,003
578
-
1,660
-
1,660
-
1,660
3,150
-
3,150
36,344
11,541
11,508
-
$’000
1,592
-
1,592
-
1,592
149
-
149
34,544
12,003
338
-
1,660
-
1,660
-
1,660
3,150
-
3,150
36,344
11,541
11,508
-
Page | 60
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
19.
CASH FLOW INFORMATION
a.
Reconciliation of net cash provided by/(used in)
from operating activities
Profit/(Loss) for the year
Change in fair value of investment properties
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other current assets
Increase/(decrease) in trade and other creditors
(Increase) in deferred tax assets
Increase in deferred tax liabilities
Net cash provided by/(used in) operating activities
Consolidated
2020
$’000
149
-
(44)
55
245
-
-
405
2019
$’000
3,150
(3,039)
(66)
(90)
148
-
-
103
b.
Significant non-cash transactions
No other significant non-cash transactions occurred during the year.
20.
CONTROLLED ENTITIES
Name of entity
HTH Holdings Pty Limited
Hudson Property Group Limited
HSC Property Pty Limited
Hudson Land Pty Limited
Halloran Properties Pty Ltd
Hudson Bowen Hill Pty Ltd
HSC Property 1 Pty Ltd
Halloran Property 1 Pty Ltd
Halloran Properties Unit Trust
Halloran Properties 1 Unit Trust
Class of
Share/unit
Equity Holding
Country of
formation or
incorporation
2020
%
100
100
100
100
100
100
100
100
100
100
2019
%
100
100
100
100
100
100
100
100
100
100
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Page | 61
Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
21.
CONTINGENT ASSETS AND LIABILITIES
Deed of Cross Guarantee
As at 31 December 2020, Hudson Investment Group Limited, HTH Holdings Pty Ltd, Hudson Property
Group Limited, HSC Property Pty Limited, Hudson Land Pty Ltd entered a Deed of Cross Guarantee under
which each Company guarantees the debts of the others.
By entering into the deed, the wholly owned entities have been relieved from the requirement to
prepare a financial report and Directors’ report under Class Order 98/1418 (as amended by Class Order
98/2017) issued by the Australian Securities & Investments Commission.
The above companies represent a ‘Closed Group’ for the purposes of the Class Order, and as there are
no other parties to the Deed of Cross Guarantee that are controlled by Hudson Investment Group
Limited, they also represent the ‘Extended Closed Group’. These consolidated financial statements for
the year ended 31 December 2020 represent those of the “Closed Group”.
22.
EVENTS OCCURRING AFTER BALANCE DATE
At the date of this report there are no other matters or circumstances, other than noted above, which
have arisen since 31 December 2020 that have significantly affected or may significantly affect:
•
•
•
The operations, in financial years subsequent to 31 December 2020 of the Group;
The results of those operations; or
The state of affairs in financial years subsequent to 31 December 2020 of the Group.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
23.
PARENT ENTITY FINANCIAL INFORMATION
a. Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance Sheet
Asset
Current assets
Non-current asset
Total assets
Current liabilities
Non-Current liabilities
Total liabilities
Shareholder’s equity
Issued Capital
Reserves
Accumulated losses
Total equity
Profit and Loss
Profit/(Loss) for the year
Total comprehensive profit/(loss)
b. Guarantees entered into by the parent entity
Parent Entity
2020
$’000
2019
$’000
29
17,310
17,339
215
2,999
3,214
89
17,400
17,489
66
2,374
2,440
63,397
-
(49,272)
14,125
63,397
-
(48,348)
15,049
(924)
(924)
(643)
(643)
Hudson Investment Group Limited has provided guarantees to several wholly owned controlled
entities within the Group. No liability was recognised by Hudson Investment Group Limited in relation
to these guarantees as the likelihood of payment is not probable.
c. Contingent liabilities of the parent entity
Refer to note 21.
d. Contractual commitments by the parent entity for the acquisition of property, plant and
equipment.
There are no contractual commitments by the parent entity for the acquisition of property, plant and
equipment.
24.
KEY MANAGEMENT PERSONNEL DISCLOSURES
a.
Directors
The following persons were Directors of Hudson Investment Group Limited during the financial year
unless otherwise stated:
Non-Executive Director
Managing Director
Executive Director
John W Farey
Alan P Beasley
Wei Huang
Non-Executive Director
John J Foley
Dr Cheng Fong Han Non-Executive Director
Appointed 1 Feb 2002
Appointed 19 Jan 2015
Appointed 4 June 2019
Appointed 6 Aug 2014
Appointed 1 June 2017
b.
Other key management personnel
The following persons were key management personnel of Hudson Investment Group Limited during
the financial year:
Henry Kinstlinger
Mona Esapournoori
Francis Choy
Joint Company Secretary Appointed 16 March 2016
Joint Company Secretary Appointed 5 June 2018
Chief Financial Officer
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
24.
KEY MANAGEMENT PERSONNEL DISCLOSURES continued
c.
Compensation of Directors and other key management personnel
Short Term Employee Benefits
Salary and
other fees
Non-
Monetary
Benefits
$
$
Consolidated
2020
Directors
Alan P Beasley
John W Farey
Wei Huang
John J Foley
Dr Cheng Fong
Han
Director - Total
KMP
Henry
Kinstlinger
Mona
Esapournoori
Kinstlinger
Francis Choy
Kinstlinger
Kinstlinger
KMP - Total
2019
Directors
Alan P Beasley
John W Farey
Wei Huang
John J Foley
Dr Cheng Fong
Han
Director - Total
KMP
Henry
Kinstlinger
Mona
Esapournoori
Francis Choy
KMP - Total
150,000
12,000
150,000
-
-
312,000
-
-
50,000
50,000
210,000
22,000
127,500
-
-
359,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Post-
Employment
Benefits
Superannuation
Long Term
Benefits
Long Service
Leave
Total
$
-
-
-
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
150,000
12,000
150,000
-
-
312,000
-
-
4,750
4,750
663
663
55,413
55,413
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
210,000
22,000
127,500
-
-
359,500
-
-
-
-
The amounts reported represent the total remuneration paid by entities in the Group in relation to
managing the affairs of all the entities within the Group. The remuneration has not been allocated
between the individual entities within the Group as this would not be practicable.
There are no performance conditions related to any of the above payments.
There is no other element of Directors and other Key Management Personnel remuneration.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
24.
KEY MANAGEMENT PERSONNEL DISCLOSURES CONTINUED
d.
Shareholdings and option holdings of key management personnel
Shares held in Hudson Investment Group Limited
The numbers of shares in the Company held during the financial year by each director of Hudson
Investment Group Limited and other key management personnel of the Group, including their
personally related parties, are set out below. There were no shares granted during the reporting
period as compensation.
Direct and indirect interest in ordinary shares
Ordinary Shares
Direct Interest
2020
Directors
John W Farey
Alan P Beasley
Wei Huang
John J Foley
Dr. Cheng Fong Han
2019
Directors
John W Farey
Alan P Beasley
John J Foley
Dr. Cheng Fong Han
Ordinary Shares
Indirect Interest
2020
Directors
John W Farey
Alan P Beasley
Wei Huang
John J Foley
Dr. Cheng Fong Han
2019
Directors
John W Farey
Alan P Beasley
Wei Huang
John J Foley
Dr. Cheng Fong Han
Balance at start
of year
shares
Changes during
the year
shares*
Balance at end
of year
shares
1,000
160,000
-
-
-
-
-
-
-
-
10,000
1,600,000
-
-
(9,000)
(1,440,000)
-
-
1,000
160,000
-
-
-
1,000
160,000
-
-
Balance at start
of year
shares
Changes during
the year
shares*
Balance at end
of year
shares
-
-
6,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
-
-
-
-
6,000,000
-
-
-
-
6,000,000
-
-
*Share consolidation 10 to 1 in May 2019
No options over unissued shares were granted during the year and no options have been granted in
the period since the end of the financial year and to the date of this report. At the date of this
report there were no unissued shares in the capital of the Company under option.
e.
Loans to key management personnel
There was no loan made to Directors and other Key Management Personnel (KMP) of Hudson
Investment Group Limited during the year.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
25.
RELATED PARTY DISCLOSURES
a.
Parent entities
The parent entity and ultimate Australian parent entity is Hudson Investment Group Limited (the
Company).
b.
Subsidiaries
Interests in subsidiaries are disclosed in Note 20.
c.
Key management personnel compensation
Key management personnel compensation information is disclosed in Note 24.
d.
Transactions with related parties
The following transactions occurred with related parties during the year
Corporate services fee paid
-
Paid to Hudson Asset Management Pty Ltd
Consolidated
2020
$
2019
$
150,000
240,000
Property Management fee paid
- Paid to Hudson Asset Management Pty Ltd
8,302
7,965
Corporate services fee paid
The Group paid corporate services fee to Hudson Asset Management Pty Limited of $150,000
(2019: $240,000) as payment of recoveries for office administration and running expenses incurred on
behalf of the group under corporate service agreement.
Property Management fee paid
The Company paid property management fee of $8,302 (2019: $7,965) to Hudson Asset Management
Pty Limited for managing its Warnervale Industrial Property.
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
25.
RELATED PARTY DISCLOSURES CONTINUED
e.
Outstanding balances
The following balances are outstanding at the reporting date in relation to transaction with related
parties:
Payable
Related Entities
Receivable
Related Entities
Provision for doubtful debts
Consolidated
2020
$000
-
1,153
-
2019
$000
-
825
-
Hudson Investment Group Limited invested in Regent Property Trust interest bearing loan note $1.15
million (2019: $0.82 million). None was written down during the year.
f.
Guarantees
No guarantees were given or received from related parties during the year.
g.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market interest rates,
except that there are no fixed terms or repayment of loans between the parties.
26.
REMUNERATION OF AUDITORS
Consolidated
2020
$
2019
$
Audit services:
Amounts paid or payable to auditors for audit and review of the
financial report for the entity or any entity in the Group
Audit and review services fees
26,295
25,620
Taxation and other advisory services:
Amounts paid or payable to the Auditor for non-audit taxation
services for the entity or any entity in the Group for review and
lodgement of the income tax return
Taxation services
Advisory services
Total
2,895
-
4,665
-
29,190
30,285
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
DECLARATION BY DIRECTORS
The directors of the Company declare that:
1.
The financial statements, comprising the statement of profit or loss and other comprehensive income,
statement of financial position, statement of cash flows, statement of changes in equity, accompanying
notes, are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards which as stated in accounting policy note 1 to the financial
statements, constitutes explicit and unreserved compliance with international Financial Reporting
Standards (IFRS); and
(b) give a true and fair view of the financial position as at 31 December 2020 and of the performance for
the year ended on that date of the Company and the Group.
2.
3.
4.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
The remuneration disclosures included on pages 13 to 15 of the Directors’ Report (as part of audited
Remuneration Report), for the year ended 31 December 2020, comply with section 300A of the
Corporations Act 2001.
The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A.
The entities identified in Note 20 are parties to the deed of cross guarantee under which each company
guarantees the debts of the others. At the date of this declaration there are reasonable grounds to believe that
the companies which are parties to this deed of cross guarantee will as a Group be able to meet any obligations
or liabilities to which they are, or may become, subject to, by virtue of the deed of cross guarantee described in
Note 21.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the directors by:
Wei Huang
Executive Director
Alan Beasley
Managing Director
Sydney
18 March 2021
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
INDEPENDENT AUDITORS’ REPORT
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
INDEPENDENT AUDITORS’ REPORT CONTINUED
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
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Hudson Investment Group Limited ACN 004 683 729
Annual Report 31 December 2020
SHAREHOLDER INFORMATION
As at 1 March 2021
A. Substantial Holders
Those shareholders who have lodged notice advising substantial shareholding under the Corporations
Act 2001 are as follows:
Shareholder
RafflesCo Limited
Millennium Investment Group Pty Ltd
Waytex Australia Pty Ltd
Raffles Nominees Pty Limited
YLH Investment Pty Ltd
ZY Capital Pty Ltd
No. of Shares
9,020,000
6,500,000
6,000,000
5,384,838
3,500,000
3,000,000
% held
15.20
10.95
10.11
9.07
5.90
5.05
B. Distribution of Equity Securities
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and above
Rounding Total
Total Holders
267
90
30
36
34
457
Units
67,435
231,247
242,296
1,299,547
57,519,410
% of Issued
Capital
0.11
0.39
0.41
2.19
96.90
59,359,935
100.00
C. Unmarketable Parcels
Minimum $500.00 parcel at $0.30 per unit
Minimum Parcel size
1,667
Holders
287
Units
95,275
RAFFLESCO LIMITED
MILLENNIUM INVESTMENT GROUP PTY LTD
WAYTEX AUSTRALIA PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
RAFFLES NOMINEES PTY LIMITED
YLH INVESTMENT PTY LTD
ZY CAPITAL PTY LTD
JT CAPITAL PTY LTD
D. Twenty Largest Shareholders
The names of the twenty largest holders of quotes equity securities aggregated are listed below:
Rank Name
1
2
3
4
5
6
7
8
9
10 MR AARON LANGLEY
11
12
13 MS KOON LIN VENUS CHIU
LIP KOON HWANG
14
15 MILLENNIUM PROPERTY INVESTMENTS PTY LTD
16
17
18
19
20 MS RACHEL ZHI TING TAN
Units % of Units
15.20
9,020,000
10.95
6,500,000
10.11
6,000,000
9.63
5,718,320
9.21
5,470,000
9.07
5,384,838
5.90
3,500,000
5.05
3,000,000
2.59
1,538,337
2.53
1,500,000
2.25
1,334,422
2.02
1,200,000
1.95
1,160,000
1.68
1,000,000
0.94
558,600
0.94
555,766
0.84
500,000
0.75
442,500
0.67
400,000
0.63
374,300
55,076,000 92.77
JT CAPITAL HOLDINGS PTY LTD
SEI HAN TAN
AZHAR HEWITTSEN ARIFFIN BIN IBRAHIM
LION CAPITAL MANAGEMENT LTD
PACIFIC PORTFOLIO INVESTMENTS PTY LTD
G & H BRASHER PTY LTD
Totals: Top 20 holders of FULLY PAID SHARE
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Annual Report 31 December 2020
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