Lee Hing Development : Consolidated Results for the year ended 31 December 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

LEE HING DEVELOPMENT LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code : 68)

CONSOLIDATED RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2020

The Board of Directors of Lee Hing Development Limited (the "Company") announced the annual results of the Company and its subsidiaries (the "Group") for the year ended 31 December 2020 as follows:

Consolidated Statement of Profit or Loss for the year ended 31 December 2020

		2020	2019
	Note	HK$'000	HK$'000
Revenue and income	3	17,024	20,160

Unrealised (loss)/gain on derivative financial instruments		(	92)		6,661
Unrealised loss on financial assets at fair value
through profit or loss - unlisted investments		(	53,632)		-
Unrealised loss on financial assets at fair value
through profit or loss - listed investments		(	48,881)	(	455,043)
Net loss on financial assets at fair value			319,316)
through profit or loss - listed investments		(		-
Impairment loss of freehold land		(	3,815)		-
Impairment loss of construction in progress			-		(	6,906)
Gain/(loss) on revaluation of investment properties			5,000		(	1,000)
Operating expenses		(	32,552)	(	25,063)
	5
Operating loss before finance costs	(	436,264)	(	461,191)
Finance costs	6	(	8,456)	(	20,365)
Operating loss after finance costs		(	444,720)	(	481,556)
Share of results of associates		(	1,772)	(	53)
Loss before tax		(	446,492)	(	481,609)
Income tax	7	(	5)	(	47)
Loss attributable to owners of the Company		(	446,497)	(	481,656)
Loss per share (HK cents)	10
Basic and diluted		(	304.19)	(	328.15)

Details of dividends paid and proposed are disclosed in note 9.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2020

		2020		2019
	Note	HK$'000	HK$'000
Loss attributable to owners of the Company	(	446,497)(	481,656)
Other comprehensive (loss)/income	8
Items that will not be reclassified to profit or loss :
Gain on revaluation of properties at the
date of change in use		-		15,999
Financial assets at fair value through other
comprehensive income : net movements in
investment revaluation reserve	(	822)(	1,500)
Item that may be reclassified subsequently
to profit or loss :
Exchange differences on translation of financial
statements of foreign subsidiaries and associates	(	821)	2,562
	(	1,643)	17,061
Total comprehensive loss attributable to
owners of the Company	(	448,140)(	464,595)

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Consolidated Statement of Financial Position as at 31 December 2020

			2020			2019
	Note		HK$'000		HK$'000
Non-current assets
Investment properties			60,000			55,000
Property, plant and equipment			26,327			30,268
Associates			25,457			27,387
Financial assets at fair value through profit or loss	11		177,097			806,120
Financial assets at fair value through other
comprehensive income	12		7,595			8,417
Other non-current assets			-			-
			296,476			927,192
Current assets
Financial assets at fair value through profit or loss	13		177,792			48,021
Derivative financial instruments	14		-			11,276
Other assets			295			295
Accounts receivable, deposits and prepayments	15		655			843
Current tax assets			30			-
Time deposits and bank balances			16,313			7,203
			195,085			67,638
Current liabilities
Bank borrowings	16		77,375			220,388
Accounts payable, deposits and accruals	17		2,201			2,801
Derivative financial instruments	14		92			-
Other payable			348			348
Current tax liabilities			-			13
			80,016			223,550
Net current assets/(liabilities)			115,069		(	155,912)
Total assets less current liabilities			411,545			771,280
Non-current liabilities
Bank borrowings	16		88,342			-
Net assets			323,203			771,280
Equity
Share capital	18		717,808			717,808
Reserves		(	394,605)		53,472
Total equity			323,203			771,280
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Notes

1. Basis of preparation
   These consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, certain financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and derivative financial instruments which are stated at fair value, in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants (" HKICPA "), except for HKFRS 9.
   The consolidated financial statements for the year ended 31 December 2020 comprise the Company and its subsidiaries and the Group's interests in associates.
   The financial information relating to the years ended 31 December 2020 and 31 December 2019 included in this preliminary announcement of annual results does not constitute the Company's statutory annual consolidated financial statements for those years but is derived from those financial statements. Further information relating to those statutory financial statements required to be disclosed in accordance with section 436 of the Hong Kong Companies Ordinance is as follows:
   The Company had delivered the financial statements for the year ended 31 December 2019 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance and will deliver the financial statements for the year ended 31 December 2020 in due course.
   The Company's auditor had reported on the financial statements of the Group for both years. The auditor's report for the year ended 31 December 2020 was qualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; did not contain a statement under sections 406(2) or 407(2) of the Hong Kong Companies Ordinance; and contained a statement under section 407(3) of the Hong Kong Companies Ordinance. The auditor's report for the year ended 31 December 2019 was qualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; did not contain a statement under section 406(2) of the Hong Kong Companies Ordinance; and contained a statement under sections 407(2) or 407(3) of the Hong Kong Companies Ordinance.
2. Adoption of new and revised Hong Kong Financial Reporting Standards
   The HKICPA has issued the following revised Hong Kong Financial Reporting Standards ("HKFRSs", which also include Hong Kong Accounting Standards ("HKASs") and Interpretations) which are effective for accounting periods beginning on or after 1 January 2020:

HKAS 1 and HKAS 8 (Amendments)	Definition of Material
HKFRS 3 (Amendments)	Definition of a Business
HKFRS 9, HKAS 39 and HKFRS 7	Interest Rate Benchmark Reform
(Amendments)

The adoption of the above revised HKFRSs has no material impact on these consolidated financial statements.

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The Group has not early applied the following new or revised HKFRSs that have been issued but are not yet effective:

Effective for accounting periods beginning on or after

HKAS 1 (Amendments)

HKAS 16 (Amendments)

HKAS 37 (Amendments)

HKFRSs (Amendments)

HKFRS 3 (Amendments)

HKFRS 9, HKAS 39,

HKFRS 7, HKFRS 4 and

HKFRS 16 (Amendments)

HKFRS 10 and HKAS 28

(Amendments)

HKFRS 16 (Amendment)

HKFRS 17

Accounting Guideline 5

(Revised)

Classification of Liabilities as Current	1 January 2023
or Non-current and Related
Amendments to Hong Kong
Interpretation 5 (2020)
Property, Plant and Equipment	1 January 2022
- Proceeds before Intended Use
Onerous Contracts	1 January 2022
- Cost of Fulfilling a Contract
Annual Improvements to	1 January 2022
HKFRSs 2018- 2020
Reference to the Conceptual	1 January 2022
Framework
Interest Rate Benchmark Reform -	1 January 2021
Phase 2
Sale or Contribution of Assets between	To be determined
an Investor and its Associate or Joint
Venture
Covid-19	1 June 2020
- Related Rent Concessions
Insurance Contracts and the Related	1 January 2023
Amendments
Merger Accounting for Common	1 January 2022
Control Combinations

The Group has already commenced an assessment of the impact of new and revised HKFRSs, certain of which may be relevant to the Group's operations and may give rise to changes in accounting policies, changes in disclosures and remeasurement of certain items in the consolidated financial statements. The Group is not yet in a position to ascertain their impact on its results of operations and financial position.

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3.	Revenue and income
	Analysis of the Group's revenue and income is as follows:
		2020	2019
		HK$'000		HK$'000
	Net gain on financial assets at fair value through
	profit or loss - listed investments	-	10,438
	Net gain on financial assets at fair value through
	profit or loss - unlisted investments	9,118	13
	Dividends from listed investments	4,013	7,808
	Dividends from unlisted investments	294	-
	Interest income on financial assets not at fair value
	through profit or loss	69	250
	Rental income	1,056	771
	Net exchange gain	1,812	-
	Write back of impairment losses on amount due from an investee
	company	-	274
	Net gain on disposal of property, plant and equipment	220	-
	Sundry income	442	606
		17,024		20,160

4. Segment reporting

The Group determines its operating segments based on the internal reports reviewed by the Group's chief operating decision maker that are used to allocate resources to the segments and assess their performance. The chief operating decision maker of the Group has been identified as the Managing Director.

Business segment

The Group comprises the following segments:

Share investment and dealing	-	investment in listed and unlisted securities, purchases and
		sales of listed securities
Other operation	-	property investment

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		Share investment and
		dealing				Other operation	Consolidated
		2020			2019			2020		2019			2020		2019
		HK$'000	HK$'000			HK$'000	HK$'000	HK$'000		HK$'000
Segment revenue and income
Revenue and income		15,968			19,389			1,056		771				17,024		20,160
Total revenue and income		15,968			19,389			1,056		771				17,024		20,160
Segment results	(	445,786 )(		473,139	)		4,881 (	1,511 )(		440,905 )(	474,650)
Impairment loss of freehold land										(		3,815	)	-
Impairment loss of construction in
progress														-	(	6,906)
Share of results of associates										(		1,772	)(	53)
Loss before tax										(		446,492	)	481,609)
Income tax										(		5	)(	47)
Loss attributable to owners of
the Company										(		446,497	)(	481,656)

		2020	2019	2020		2019		2020			2019
		HK$'000	HK$'000	HK$'000		HK$'000		HK$'000		HK$'000
Segment assets		395,552	897,817	60,233		55,522		455,785			953,339
Associates								25,457			27,387
Unallocated assets								10,319			14,104
Total assets								491,561			994,830
Segment liabilities		143,160	197,169	25,198		26,368		168,358			223,537
Unallocated liabilities								-			13
Total liabilities								168,358			223,550
		2020	2019	2020		2019		2020			2019
		HK$'000	HK$'000	HK$'000		HK$'000		HK$'000		HK$'000
Other segment information
Depreciation		381	448	265		230		646			678
Amortisation of
leasehold land		16	74	-		-		16			74
Additions to property,
plant and equipment		696	90	-		-		696			90
Unrealised (loss)/gain on derivative
financial instruments	(	92 )	6,661	-		-	(	92)		6,661
Unrealised loss on financial
assets at fair value through
profit or loss - unlisted
investments		53,632	-	-		-		53,632			-
Unrealised loss on financial assets
at fair value through profit or
loss - listed investments		48,881	455,043	-		-		48,881			455,043
Gain/(loss) on revaluation of investment
properties		-	-	5,000	(	1,000 )		5,000		(	1,000 )
Finance costs		7,744	19,521	712		844		8,456			20,365
Interest income		69	250	-		-		69			250
Net loss on financial assets at
fair value thought profit or
loss - listed investments		319,316	-	-		-		319,316			-
Net gain on financial assets
at fair value through
profit or loss - unlisted
investments		9,118	13	-		-		9,118			13
Net gain on disposal of
property, plant and
equipment		220	-	-		-		220			-
Net loss on derivative financial instruments		11,246	-	-		-		11,246			-
			-7-

Segment results represent profit/loss incurred by each segment without share of results of associates, impairment loss of freehold land, impairment loss of construction in progress and income tax.

Segment assets include all non-current assets and current assets with the exception of interests in associates, freehold land outside Hong Kong, construction in progress and current tax assets.

Segment liabilities include all non-current liabilities and current liabilities with the exception of current tax liabilities.

Geographical information

Analysis of the Group's revenue and income, and non-current assets (excluding financial instruments) by geographical location is as follows:

	Revenue and income		Non-current assets
	2020	2019	2020	2019
	HK$'000		HK$'000		HK$'000		HK$'000
Hong Kong	2,035	1,375	75,690	70,826
Malaysia	4,060	18,473	-	-
Thailand	-	-	23,433	25,351
Britain	9,908	-	-	-
Europe	965	-	-	-
Japan	-	-	10,289	14,104
Others	56		312		-		-
	17,024	20,160	109,412	110,281

The geographical location of revenue and income is mainly based on the location of stock market in which the securities are listed or place of incorporation of unlisted companies. The geographical location of non-current assets is based on the physical location of assets or location of operation of associates.

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5. Operating loss before finance costs
		2020		2019
		HK$'000		HK$'000
Operating loss before finance costs
is stated at after charging/(crediting):
Auditors' remuneration:
audit services		465		459
others		232		82
Directors' emoluments:
fees		760		760
salaries and allowances		8,299		9,135
contributions to retirement scheme		297		297
Staff costs (excluding Directors' emoluments)		3,070		3,301
Depreciation		646		678
Amortisation of leasehold land		16		74
Net loss on derivative financial instruments		11,246		-
Net loss/(gain) on financial assets at fair value through
profit or loss - listed investments		319,316	(	10,438)
Impairment loss/(write back) on amount due from an investee
company		965	(	274)
Net gain on disposal of property, plant and equipment	(	220)		-
Net exchange (gain)/loss	(	1,812)		2,452
Net gain on financial assets at fair value
through profit or loss - unlisted investments	(	9,118)	(	13)
Rental income from investment properties	(	1,056)	(	771)
Direct operating expenses arising from investment properties		180		180

6. Finance costs

	2020	2019
	HK$'000		HK$'000
Interest expenses on financial liabilities not at
fair value through profit or loss:
interest on bank loans	8,012	18,803
interest on bank overdrafts	157		214
	8,169	19,017
Bank loan arrangement fee and bank charges	287		1,348
	8,456	20,365

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7. Income tax
	2020
	HK$'000
Current tax
Company and subsidiaries
Overseas taxation	5

Overseas taxation is calculated at the rates prevailing in the relevant jurisdictions.

8. Other comprehensive (loss)/income

		2020
		HK$'000
Gain on revaluation of properties at the
date of change in use		-
Financial assets at fair value through other
comprehensive income
Changes in fair value recognised during the year	(	822)	(
Net movements in investment revaluation reserve
during the year recognised in other comprehensive
income	(	822)	(
Exchange differences on translation of financial
statements of foreign subsidiaries and associates	(	821)
Other comprehensive (loss)/income for the year,
net of tax	(	1,643)

9. Dividends

2019

HK$'000

47

2019 HK$'000

15,999

1,500)

1,500)

2,562

17,061

The Directors do not recommend the payment of a dividend for the year ended 31 December 2020 (2019:Nil).

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1. Loss per share
   The calculation of basic loss per share is based on loss attributable to owners of the Company of HK$446,497,000 (2019: HK$481,656,000) and the weighted average of 146,781,285 shares (2019: 146,781,285 shares) in issue during the year.
   Diluted loss per share is same as basic loss per share because there were no potential dilutive shares outstanding during the years 2019 and 2020.
2. Financial assets at fair value through profit or loss

		2020			2019
		HK$'000		HK$'000
Listed equity securities, at market value
Overseas		-			806,120
Unlisted investments, at fair value		177,097			-
		177,097			806,120
At 1 January		806,120			1,534,776
Additions/conversion		295,794			2,654
Disposals	(	644,886)	(	229,502)
Transfer	(	177,792)	(	48,021)
Changes in fair value recognised
in profit or loss	(	102,513)	(	455,043)
Exchange differences recognised
in translation reserve		374			1,256
At 31 December		177,097			806,120

Exchange differences represent part of exchange differences arising from translation of financial statements of foreign entities.

Fair value of unlisted investments of HK$177,097,000 was determined by the Directors by reference to the Group's share of net assets of Ingredion SRSS Holdings Limited based on its unaudited financial statements as at 31 December 2020.

As at 31 December 2019, included in listed equity securities of HK$806,120,000 , an amount of HK$560,632,000 was market value of investment in PureCircle Limited as at 28 October 2019 (date of suspension of trading).

-11-

12. Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income are equity securities held for strategic purposes and stated at fair value. The Group elected to classify irrevocably these investments as financial assets at fair value through other comprehensive income. Dividend of HK$294,000 was received by the Group during the year (2019: Nil).

		2020			2019
		HK$'000		HK$'000
At 1 January		8,417			9,917
Changes in fair value recognised
in other comprehensive income	(	822)	(	1,500)
At 31 December		7,595			8,417

13. Financial assets at fair value through profit or loss
	2020	2019
	HK$'000		HK$'000
Listed equity securities, at market value
Overseas	177,792	-
Call option	-		48,021
	177,792	48,021

Call option was related to ordinary shares of PureCircle Limited of which the trading was suspended on 28 October 2019. The carrying amount of the call option was estimated by reference to the latest available market price at 28 October 2019 of shares of PureCircle Limited.

14. Derivative financial instruments
			2020		2019
			HK$'000	HK$'000
Equity swaps	(	92)	11,276
15. Accounts receivable, deposits and prepayments
			2020		2019
			HK$'000	HK$'000
Other receivable and deposits			510		683
Prepayments			145		160
			655		843

No ageing analysis has been prepared as there was no trade receivable at 31 December 2020 (2019:Nil).

-12-

16. Bank borrowings
		2020		2019
		HK$'000	HK$'000
Secured bank overdrafts		-		3,603
Secured bank loans		88,342		98,281
Secured bank loans subject to a repayment on
demand clause		77,375		118,504
		165,717		220,388
Less: Current portion	(	77,375) (	220,388)
Non-current portion		88,342		-

Repayments of bank loans and overdrafts based on the scheduled repayment dates set out in the loan agreements are as follows:

	2020	2019
	HK$'000			HK$'000
Within one year	64,191	206,359
After one year but within two years	803	652
After two years but within five years	90,822	2,053
After five years	9,901		11,324
	165,717	220,388
17. Accounts payable, deposits and accruals
	2020	2019
	HK$'000			HK$'000
Accounts payable, deposits and accruals	2,201	2,801

No ageing analysis has been prepared as there was no trade payable at 31 December 2020 (2019: Nil).

18. Share capital

	2020	2019
	Number of				Number of
	shares				shares
	('000)		HK$'000	('000)		HK$'000
Issued and fully paid
At 31 December	146,781	717,808	146,781		717,808

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19. Reserves

Movements in reserves are as follows:

		Investment					Property			Retained profits/
		revaluation		Translation	revaluation			(accumulated
		reserve		reserve	reserve			losses)			Total
		HK$'000			HK$'000		HK$'000			HK$'000			HK$'000
Balance at 1 January 2020	(	1,913 )		11,774			15,999			27,612			53,472
Loss for the year		-				-			-	(		446,497)	(		446,497)
Other comprehensive income
for the year
Financial assets at fair value
through other comprehensive
income	(	822)		-			-			-		(		822)
Exchange differences on
translation of financial
statements of foreign
subsidiaries and
associates		-			(	821)		-			-		(		821)
Total comprehensive loss
for the year	(	822)	(	821)		-	(		446,497)	(		448,140)
Unclaimed dividend forfeited		-				-			-			63				63
		-				-			-			63				63
Balance at 31 December 2020	(	2,735)		10,953			15,999	(		418,822)	(		394,605)

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Extract of Independent Auditor's Report

The below sections set out an extract of the report by CHENG & CHENG LIMITED, the auditor of the Company, regarding the Group's consolidated financial statements for the year ended 31 December 2020.

Qualified opinion

In our opinion, except for the possible effects of the matters described in the Basis for qualified opinion section of our report, the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at 31 December 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and have been properly prepared in compliance with the Hong Kong Companies Ordinance.

Basis for qualified opinion

As at 31 December 2019, the Group held equity interest in PureCircle Limited with carrying amount of HK$560,632,000.The Group classified this investment as financial assets at fair value through profit or loss - listed investment. The Group also held call option with carrying amount of HK$48,021,000 which was related to ordinary shares of PureCircle Limited (the "call option") and classified as financial assets at fair value through profit or loss. However, the suspension of the trading in ordinary shares of PureCircle Limited took effect from 28 October 2019. Therefore, no market value of the PureCircle Limited was available as at 31 December 2019. The carrying amounts of the equity interest in PureCircle Limited and the call option were determined by reference to the closing quoted price of the ordinary shares of PureCircle Limited at 28 October 2019. There might be change of the fair value of the ordinary shares of PureCircle Limited and the call option due to the suspension of trading and the operations since 28 October 2019. The Group did not provide any reasonable measurements to reflect the fair value of the ordinary shares of PureCircle Limited and the call option. We were unable to obtain sufficient appropriate audit evidence as to the fair value of investment in PureCircle Limited and call option as at 31 December 2019 and 1 January 2020 as required under HKFRS 9 and to quantify the effect, if any, on the net assets as at 31 December 2019 and 1 January 2020, and loss for the year ended 31 December 2019. Accordingly, comparative amounts might not be comparable with those of current year.

During the year ended 31 December 2020, all the equity interest in PureCircle Limited was disposed of at consideration of (i) cash consideration of HK$59,374,000 and (ii) 39,246,277 B ordinary shares of Ingredion SRSS Holdings Limited. As at 31 December 2020, investment in Ingredion SRSS Holdings Limited was classified as financial assets at fair value through profit or loss and stated at the carrying amount of HK$177,097,000. Since the Group could not obtain sufficient information to carry out a reasonable valuation, the carrying amount of HK$177,097,000 was determined by reference to the Group's share of net assets of Ingredion SRSS Holdings Limited based on its unaudited financial statements as at 31 December 2020. Consequently, we were unable to obtain sufficient appropriate audit evidence as to the fair value of investment in Ingredion SRSS Holdings Limited as at 31 December 2020 and to quantify the effect, if any, on the net assets as at 31 December 2020.

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In view of the circumstances as mentioned in the preceding paragraphs and the absence of reliable valuations of investments in PureCircle Limited as at 31 December 2019 and 1 January 2020, and B ordinary shares of Ingredion SRSS Holdings Limited as at 31 December 2020, we were unable to obtain sufficient appropriate audit evidence as to the accuracy of the fair value changes relevant to these two investments recognised in the consolidated statement of profit or loss, including loss on disposal of equity interest in PureCircle Limited of HK$302,852,000 and gain on disposal of B ordinary shares of Ingredion SRSS Holdings Limited of HK$9,118,000, included in "net loss on financial assets at fair value through profit or loss - listed investments" and "revenue and income" of the consolidated statement of profit and loss respectively.

We conducted our audit in accordance with Hong Kong Standards on Auditing ("HKSAs") issued by the HKICPA. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the HKICPA's Code of Ethics for Professional Accountants (the" Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Information other than the consolidated financial statements and auditor's report thereon

The Directors are responsible for the other information. The other information comprises the information included in the annual report but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. As described in the Basis for qualified opinion section above, we were unable to obtain sufficient appropriate evidence about investment in PureCircle Limited and the call option as at 31 December 2019 and 1 January 2020, and loss for the year ended 31 December 2019, loss on disposal of equity interest in PureCircle Limited, gain on disposal of B ordinary shares of Ingredion SRSS Holdings Limited, and investment in Ingredion SRSS Holdings Limited as at 31 December 2020. Accordingly, we are unable to conclude whether or not the other information is materially misstated with respect to these matters.

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Dividends

In 2020, no interim dividend (2019: Nil ) was paid. The Directors do not recommend the payment of a final

dividend (2019: Nil) for the year ended 31 December 2020.

Management Discussion and Analysis

Results for the year

The Group recorded HK$17 million revenue and income for the year ended 31 December 2020, a 16% decrease as compared with last year. The decrease was largely attributable to the net gain on financial assets at fair value through profit or loss - listed investments in 2019 turned into net loss in 2020 and decrease in dividend income.

Operating loss after finance costs was HK$445 million, a decrease of HK$37 million as compared with last year. The decrease was mainly attributable to decrease in unrealised loss on financial assets at fair value through profit or loss - listed investments and finance costs.

Business review

The Group is principally engaged in share investment and dealing.

During the year under review, the Group's revenue and income were mainly attributable to dividends from listed investments of HK$4 million, net gain on financial assets at fair value through profit or loss - unlisted investments of HK$9.1 million, rental income of HK$1.1 million and exchange gain of HK$1.8 million. In 2020, preference shares of IGB Berhad of HK$156.8 million were converted into ordinary shares of IGB Berhad. Call option of HK$48.1 million was also converted into ordinary shares of PureCircle Limited. The entire ordinary shares of PureCircle Limited held by the Group have been disposed of in exchange with cash and B ordinary shares of Ingredion SRSS Holdings Limited. Details of which are described in the announcement and circular of the Company dated 15 April 2020 and 23 July 2020 respectively.

It is expected that the operating performance of the Group will continue to be affected by the outbreak of COVID-19 in the near term.

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Financial resources and liquidity

The Group's borrowings were secured bank loans. With respect to interest rate structure of the borrowings, interest rates were 1.35% to 1.5% per annum above the bank's cost of fund, 1.25% to 2.7% per annum above HIBOR, 1% per annum below prime rate or 3% to 3.75% per annum above LIBOR.

The gearing ratio of the Group was 51%. The computation is based on total borrowings of the Group divided by total equity as at 31 December 2020.

Charges on Group's assets

The Group's leasehold land, buildings and investment properties, certain financial assets at fair value through profit or loss and bank deposits with a total net book value of approximately HK$253 million were pledged to banks to secure banking facilities granted to the Group.

Contingent liabilities

As at 31 December 2020, the Group had no contingent liabilities but the Company had contingent liabilities in respect of guarantees for banking facilities granted to its subsidiaries in the sum of HK$199 million.

Significant investments

The following table sets out information regarding the Group's significant investments classified as financial assets at fair value through profit or loss:

	Equity interest		Fair value
Name of the	held as at		as at 31	Percentage to
investee company	31 December 2020	Cost of investment	December 2020	total assets
IGB Berhad	35,829,816 ordinary	HK$133 million	HK$177.8 million	36.2%
	shares, representing		(RM2.58 per
	approximately 4.06%		share)
	of the ordinary
	shares in issue
	(2019:1.6%)
Ingredion SRSS	36,746,277 B	HK$231 million	HK$177.1 million	36%
Holdings Limited	ordinary shares,
	representing
	approximately 8.21%
	of the ordinary
	shares in issue
	(2019:Nil)

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The following table sets out the movement of the financial assets at fair value through profit or loss during the year ended 31 December 2020:

	Acquisition/disposal
	/conversion
	during the year			Dividend
Name of the	ended	Cost of acquisition/	Gain/loss on	received during
investee company	31 December 2020	disposal proceeds	disposal	the year
PureCircle	Conversion of	-	-	-
Limited	3,581,394 ordinary
	shares (Note)

Disposal of	Proceeds in the
45,392,610 ordinary	amount of HK$305.8
shares	million

Loss on disposal	-
in the amount of
HK$302.9 million

Ingredion SRSS	Acquisition of	Cost of acquisition of	-	-
Holdings Limited	39,246,277 B	HK$246.4 million
	ordinary shares
	Disposal of	Proceeds in the	Gain on disposal	-
	2,500,000 B ordinary	amount of HK$24.8	of HK$9.1million
	shares	million
IGB Berhad	Disposal of 950,000	Proceeds in the	Loss on disposal	Received dividend
	ordinary shares	amount of HK$4.1	in the amount of	in the amount of
		million	HK$2.4 million	HK$1.3 million
				and HK$2.7 million
				on the ordinary
				shares and the
				preference shares,
				respectively

Acquisition of	Cost of acquisition in
269,394 ordinary	the amount of HK$1.3
shares	million
Conversion of	-
25,611,371 ordinary
shares from
preference shares

--

--

Note

3,581,394 units of call option in the amount of HK$48.1 million were converted into ordinary shares of PureCircle Limited.

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The following table sets out the change in fair value of the financial assets at fair value through profit or loss during the year ended 31 December 2020:

					Change in fair
	Fair value				value	Fair value
Name of	as at 31				recognised	as at
investee	December	Additions /		Translation	in the	31 December
company	2019	conversion	Disposals	reserve	profit or loss	2020
PureCircle	HK$560.6 million	HK$48.1million	(HK$608.7 million)	-	-	-
Limited
Ingredion	-	HK$246.4 million	(HK$15.7 million)	-	(HK$53.6 million)	HK$177.1 million
SRSS
Holdings
Limited
IGB	HK$74.7 million	HK$158.1 million	(HK$6.5 million)	HK$0.4 million	(HK$48.9 million)	HK$177.8 million
Berhad-
ordinary
shares
IGB	HK$170.8 million	(HK$156.8 million)	(HK$14 million)	-	-	-
Berhad-
preference
shares

Ingredion SRSS Holdings Limited produces and distributes stevia sweeteners and flavors to food and beverages industry worldwide. On 29 January 2021, Ingredion SRSS Holdings Limited changed its name to PureCircle Limited

IGB Berhad is principally an investment holding company engaged in property investment and management, retail, hotel operations and construction. It also has private equity investments in the field of information and communications technology and water/wastewater treatment.

The Group has no control or influence over PureCircle Limited and IGB Berhad, hence, for the business performance, factors which may affect the share price and business outlook and future prospects of the two companies, shareholders and potential investors should refer to information published on the two websites, www.purecircle.comand www.igbbhd.com.

Depending on the market conditions and the availability of funding, the Group may acquire additional shares or dispose of some of its interest in IGB Berhad.

Material acquisitions and disposals

Other than those disclosed in above, the Group did not have any material acquisition or disposal during the year.

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Foreign currency exposure

The Group had major investments, amounts receivables, bank balances, accounts payable and bank loans denominated in Malaysian Ringgit, British Pound, Euro, Japanese Yen and Thai Baht, hence the Group had direct exposure to foreign exchange fluctuations. During the year under review, the Group did not use any foreign currency derivative product to hedge its exposure to currency risk. However, the management managed and monitored the exposure to ensure appropriate measures were implemented on a timely and effective manner.

Employees

As at 31 December 2020, the Group's number of staff was 9. The Group's remuneration policies, including both salaries and bonuses, are in line with local practice.

Purchase, Sale and Redemption of Listed Securities

There was no purchase, sale or redemption of the Company's listed securities by the Company or its subsidiaries during the year.

Audit Committee

The Audit Committee was established in accordance with the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") for the purposes of reviewing and providing supervision over the Group's financial reporting system, risk management and internal control systems. The Audit Committee consists of 3 Independent Non-executive Directors of the Company.

The Audit Committee has reviewed the annual results for the year ended 31 December 2020 and has discussed the financial related matters with management. The figures in respect of the Group's consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income and the related notes thereto for the year ended 31 December 2020 as set out in the preliminary announcement have been agreed by the Group's auditor, CHENG & CHENG LIMITED, to the amounts set out in the Group's draft consolidated financial statements for the year. The work performed by CHENG & CHENG LIMITED in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by CHENG & CHENG LIMITED on the preliminary announcement.

Corporate Governance Code and Corporate Governance Report

The Company has complied with the code provisions under the Corporate Governance Code as set out in Appendix 14 to the Listing Rules throughout the year ended 31 December 2020, except for the following deviations from code provisions A.2.1, A.4.1, A.6.7 and C.2.5:

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Code Provision A.2.1

Under code provision A.2.1, the roles of the Chairman and Chief Executive Officer (CEO) are required to be separated and not be performed by the same individual. During the year, Mr. Tan Boon Seng acted as an Executive Director, Chairman and Managing Director of the Company (equivalent to CEO in this case). This constitutes a deviation from code provision A.2.1. The reason for such deviation is set out below:

The arrangement under which the roles of an Executive Director, Chairman and Managing Director are performed by the same individual is the extension of the Company's existing corporate governance model. It has been considered beneficial at the present stage as it helps to maintain the continuity of the Company's policies and the stability of the Company's operations, as well as to enhance the management of the Company.

Code Provision A.4.1

Under code provision A.4.1, Non-executive Directors should be appointed for a specific term and be subject to re-election. None of the existing Non-executive Directors of the Company is appointed for a specific term. This constitutes a deviation from code provision A.4.1. The reason for such deviation is set out below:

According to the Articles of Association of the Company, one-third of the Directors (Executive and Non- executive) will retire from the office by rotation at each annual general meeting and their appointments will be reviewed when they are due for re-election. In the opinion of the Directors, this meets the same objectives and is no less exacting than those in the code.

Code Provision A.6.7

Under code provision A.6.7, Independent Non-executive Directors and other Non-executive Directors should attend general meetings and develop a balanced understanding of the views of shareholders. Three members of the Independent Non-executive Directors of the Company were unable to attend the annual general meeting of the Company held on 13 May 2020.

Code Provision C.2.5

Under code provision C.2.5, the Group should have an internal audit function. During the year, the Group conducted a review on the need for setting up an internal audit department. Given the Group's simple operating structure and the potential cost burden, it was decided that the Group would not set up an internal audit department for the time being and the Audit Committee under the Board of Directors would be responsible for internal control and risk management of the Group and for reviewing their effectiveness.

Model Code for Securities Transactions by Directors

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") set out in Appendix 10 to the Listing Rules. Upon enquiry by the Company, all Directors of the Company have confirmed that they have complied with the required standard set out in the Model Code throughout the year ended 31 December 2020.

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Closure of Register of Members

The annual general meeting will be held on Thursday, 20 May 2021 at 11:00 a.m. at the meeting room of the Company's registered office at Suite 1506-07, 15th Floor, Nine Queen's Road Central, Hong Kong. For the purpose of ascertaining entitlement of Shareholders of the Company ("Shareholders") to attend and vote at the annual general meeting, the register of members of the Company will be closed from 14 May 2021 to 20 May 2021, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the annual general meeting, Shareholders are reminded to lodge their transfers for registration no later than 4:30 p.m. on Thursday, 13 May 2021 with the Share Registrar of the Company, Tricor Standard Limited of Level 22, Hopewell Centre, 183 Queen's Road East, Hong Kong.

By Order of the Board

Lee Hing Development Limited

Tan Boon Seng

Chairman and Managing Director

Hong Kong, 13 April 2021

As at the date hereof, the Board of Directors of the Company comprises two Executive Directors, namely Mr. Tan Boon Seng and Mr. Chan Kai Kwok and three Independent Non-executive Directors, namely Mr. Ho Hau Chong, Norman, Mr. Fung Ka Pun and Mr. Lim Lay Leng.

Please refer to the electronic version of this announcement on the website of The Stock Exchange of Hong Kong Limited ("the Stock Exchange") (http://www.hkex.com.hk) and the website of the Company (http://www.lhd.com.hk). An annual report for the year ended 31 December 2020 containing all the applicable information required by Appendix 16 to the Listing Rules will be despatched to Shareholders and published on the website of the Stock Exchange and the website of the Company in due course.

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