松龄护老集团(01989) - 2023 - 年度业绩

Company Overview Pine Care Group Limited, a Cayman Islands-registered company listed on the HKEX, primarily provides elderly care services Company Information Pine Care Group Limited is a Cayman Islands-registered company listed on the HKEX main board, primarily engaged in providing elderly care services - Company Name: Pine Care Group Limited - Place of Registration: Cayman Islands - Listing Venue: Main Board of The Stock Exchange of Hong Kong (Stock Code: 1989) - Principal Business: Provision of elderly care services Business Outlook Despite challenges in FY2023, the company maintained robust operations, focusing on human-centric health and elderly care, expanding services, and leveraging new shareholder resources - Business operations in FY2023 remained stable and flexible, demonstrating high resilience[3] - Future plans include collaborating with the Board and management to develop health and elderly care businesses under a 'people-oriented' philosophy, offering elderly-friendly and green facilities, and providing community services for the elderly[5] - The introduction of Saming Limited and its subsidiaries (the 'Chinachem Group') as the new controlling shareholder will leverage their resources and expertise to enhance Pine Care Group's value[10] - Plans include expanding excellent services to home-based elderly care, community care development programs, and implementing the concept of continuing care retirement communities[16][216] Financial Summary FY2023 revenue remained stable at HK$265.3 million, but the company recorded a HK$27.8 million loss, primarily due to finance costs and fair value losses on financial assets FY2023 Financial Summary | Metric | FY2023 (million HKD) | FY2022 (million HKD) | | :----------- | :------------------- | :------------------- | | Revenue | 265.3 | 267.7 | | Loss | 27.8 | - | | Core EBITDA | 47.8 | 53.7 | - FY2023 loss of HK$27.8 million, primarily due to finance costs of HK$22.7 million and a non-recurring fair value loss of HK$15.2 million on financial assets, partially offset by a HK$7.9 million subsidy from the Employment Support Scheme[7] - Core EBITDA decreased to HK$47.8 million (FY2022: HK$53.7 million), mainly due to initial operating losses from Pine Care Place[7][202] Management Report Chairman's Statement The Chairman's Statement highlights robust business operations in a challenging FY2023, strong core business performance, the introduction of Chinachem Group as a new controlling shareholder, and future expansion into home and community care services - FY2023 remained challenging for many industries, but the company's business operations continued to be stable, flexible, and highly resilient[3] - Core business remained strong, with an average occupancy rate of 88.9% for 8 Type A elderly care homes in FY2023 (FY2022: 92.7%)[9] - The occupancy rate for Pine Care Place (Pine Care Villa and Pine Care Lodge) recorded a double-digit increase of 12.4 percentage points to 71.9% in FY2023[9] - The introduction of Saming Limited and its subsidiaries (the 'Chinachem Group') as the new controlling shareholder will leverage their resources and expertise to enhance Pine Care Group's value[10] - Pine Care Place commenced operations in December 2022, positioned as the new flagship of Pine Care Place, offering high-end elderly care services[13][39] - Future plans include exploring the concept of continuing care retirement communities and expanding excellent services to home-based elderly care and community care development programs[16][216] Business Overview Despite a challenging FY2023, the company maintained robust and flexible operations, prioritizing resident well-being, with strong core business performance and high occupancy rates in its elderly care homes - FY2023 remained challenging for many industries, but the company's business operations continued to be stable and flexible, maintaining high resilience[3] - The company is committed to providing quality care services, prioritizing the well-being of its residents[9] - Core business remained strong, with an average occupancy rate of 88.9% for 8 Type A elderly care homes in FY2023 (FY2022: 92.7%)[9] - The occupancy rate for Pine Care Place (Pine Care Villa and Pine Care Lodge) recorded a double-digit increase of 12.4 percentage points to 71.9% in FY2023[9] Strategic Focus and Future Outlook The company introduced Chinachem Group as a new controlling shareholder to optimize value, opened a new flagship Pine Care Place, and plans to expand into home and community care services while exploring continuing care retirement communities - The company introduced Saming Limited and its subsidiaries (the 'Chinachem Group') as the new controlling shareholder, leveraging their resources and expertise to enhance Pine Care Group's value[10] - Pine Care Place commenced operations in December 2022, positioned as the new flagship of Pine Care Place, offering the highest quality and comprehensive care services[13][39] - Pine Care Place, located in a prime location on Hong Kong Island, is equipped with professional care staff and advanced technology to provide the highest standard of elderly care[224] - Future plans include exploring the concept of continuing care retirement communities and expanding excellent services to home-based elderly care and community care development programs[16][216] Business Review The Group's revenue, primarily from elderly care services and related goods in Hong Kong, remained stable at HK$265.3 million in FY2023, with increased occupancy in Pine Care Place offsetting declines in other care homes - The Group's revenue primarily derives from providing elderly care services in Hong Kong (including accommodation, professional nursing, nutritional management, medical services, psychological and social care, personalized care plans) and selling age-related goods[100] Total Revenue | Metric | FY2023 (million HKD) | FY2022 (million HKD) | | :----------- | :------------------- | :------------------- | | Total Revenue | 265.3 | 267.7 | - Revenue stability was mainly due to satisfactory growth in revenue and occupancy rate at Pine Care Villa, offsetting reduced revenue from other elderly care homes[101] Average Occupancy Rate of Elderly Care Homes | Type of Elderly Care Home | FY2023 Average Occupancy Rate | FY2022 Average Occupancy Rate | | :------------------------ | :---------------------------- | :---------------------------- | | Type A Elderly Care Homes | 88.9% | 92.7% | | Pine Care Place | 71.9% | 59.5% | - Revenue from Pine Care Place (Pine Care Villa, Pine Care Lodge, and Pine Care Place) increased from HK$45.5 million in FY2022 to HK$53.4 million[102] Core Business Performance The Group operates eight Type A and two high-end Pine Care Place elderly care homes in Hong Kong, experiencing increasing demand for quality elderly care despite short-term impacts from the pandemic - The Group's operations in Hong Kong primarily include eight Type A elderly care homes and two high-end Pine Care Place elderly care homes (Pine Care Villa and Pine Care Lodge)[129] - Despite the short-term impact of the fifth wave of COVID-19 on the elderly population and care home occupancy, the demand for high-quality elderly care services is increasing due to Hong Kong's aging population[130] Revenue from Type A Elderly Care Homes | Metric | FY2023 (million HKD) | FY2022 (million HKD) | | :----------- | :------------------- | :------------------- | | Total Revenue | 211.8 | 218.7 | New Business Development The new flagship Pine Care Place elderly care home in Causeway Bay commenced trial operations in December 2022, contributing to a significant increase in the average occupancy rate of Pine Care Place facilities - The new flagship Pine Care Place elderly care home in Causeway Bay, Hong Kong Island, commenced trial operations in December 2022[129] - The average occupancy rate for Pine Care Place (Pine Care Villa, Pine Care Lodge, and Pine Care Place) increased by 12.4 percentage points from 59.5% in FY2022 to 71.9% in FY2023[102] Performance Review The loss for FY2023 increased to HK$27.8 million, primarily due to higher finance costs and fair value losses on financial assets, partially offset by government subsidies and the absence of share of loss from a joint venture, while Core EBITDA decreased due to initial operating losses from Pine Care Place Loss for the Year and Core EBITDA | Metric | FY2023 (million HKD) | FY2022 (million HKD) | | :----------- | :------------------- | :------------------- | | Loss for the Year | (27.8) | (24.0) | | Core EBITDA | 47.8 | 53.7 | - The increase in loss was mainly due to a HK$12.2 million increase in finance costs to HK$22.7 million and a non-recurring fair value loss of HK$15.2 million on financial assets in FY2023[106] - The loss was partially offset by a non-recurring subsidy of HK$7.9 million from the HKSAR Government's Employment Support Scheme and the absence of share of loss from a joint venture in FY2023 (FY2022: HK$13.3 million)[106] - The decrease in Core EBITDA was mainly due to operating losses incurred by Pine Care Place in its initial operational phase; excluding the impact of Pine Care Place, Core EBITDA remained stable[134] Financial Review The Group's FY2023 financial performance was marked by increased depreciation due to Pine Care Place, higher staff costs from industry-wide labor shortages, reduced inter-professional team fees, significantly higher finance costs from rising interest rates, and lower income tax expense due to reduced taxable profit Key Financial Data Changes | Metric | FY2023 (million HKD) | FY2022 (million HKD) | Change (YoY) | | :----------------- | :------------------- | :------------------- | :----------- | | Depreciation | 63.7 | 57.2 | +11.3% | | Total Staff Costs | 134.7 | 130.0 | +3.7% | | Inter-professional Team Fees | 12.6 | 15.3 | -17.9% | | Finance Costs | 22.7 | 10.5 | +116.2% | | Income Tax Expense | 3.1 | 6.3 | -50.8% | | Loss for the Year (Parent) | (27.8) | (20.6) | +34.9% | - Depreciation increased primarily due to depreciation of right-of-use assets for Pine Care Place[109] - Staff costs increased mainly due to overall salary increases resulting from labor shortages in the healthcare industry, despite government subsidies[110] - Inter-professional team fees decreased primarily due to reduced reliance on employment agencies as the Group directly hired more care workers[139] - Finance costs significantly increased mainly due to rising effective interest rates during the year[115] - Income tax expense decreased primarily due to reduced taxable profit[143] - An impairment of HK$5.4 million was recognized for amounts due from a joint venture due to its termination of operations[113] - A fair value loss of HK$15.5 million on unlisted equity securities was recorded due to minimal recovery prospects for the investment[114] Revenue and Other Income The Group's total revenue for FY2023 was HK$265,269 thousand, primarily from elderly care services and age-related goods, with HK$111,501 thousand from the Hong Kong Government's Enhanced Buy-out Scheme, and other income mainly from COVID-19 related rent concessions Revenue Composition | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :----------------------- | :------------------ | :------------------ | | Provision of elderly care services | 233,657 | 237,276 | | Sale of age-related goods | 31,612 | 30,473 | | Total Revenue | 265,269 | 267,749 | - In FY2023, HK$111,501 thousand of revenue was generated from the Hong Kong Government's Enhanced Buy-out Scheme (2022: HK$110,509 thousand), accounting for over 10% of the Group's revenue[61] Other Income | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :----------------------- | :------------------ | :------------------ | | Bank interest income | 33 | - | | Rental income | 666 | 628 | | COVID-19 related rent concession | 3,910 | - | | Total Other Income | 4,609 | 628 | Key Operating Expenses The Group's key operating expenses in FY2023 saw an 11.3% increase in depreciation due to Pine Care Place, a 3.7% rise in total staff costs from labor shortages, and a 17.9% decrease in inter-professional team fees due to direct hiring Changes in Key Operating Expenses | Expense Item | FY2023 (million HKD) | FY2022 (million HKD) | Change (YoY) | | :----------------------- | :------------------- | :------------------- | :----------- | | Depreciation | 63.7 | 57.2 | +11.3% | | Total Staff Costs (net of subsidies) | 115.9 | 117.8 | -1.6% | | Inter-professional Team Fees | 12.6 | 15.3 | -17.9% | | Property Rental and Related Expenses | 9.4 | 9.5 | -1.1% | | Other Operating Expenses | 15.4 | 16.8 | -8.7% | - Depreciation increased primarily due to depreciation of right-of-use assets for Pine Care Place[109] - Total staff costs (before government subsidies) increased by approximately 3.7% to HK$134.7 million, mainly due to overall salary increases resulting from labor shortages in the healthcare industry in FY2023[110] - Inter-professional team fees decreased primarily due to reduced reliance on employment agencies as the Group directly hired more care workers[139] - Other operating expenses decreased by approximately 8.7%, mainly due to reduced advertising and marketing expenses in FY2023[141] Impairment and Fair Value Changes In FY2023, the Group recognized an impairment of HK$5.4 million on receivables from a joint venture due to its termination and a fair value loss of HK$15.2 million on financial assets due to minimal recovery prospects - An impairment of HK$5.4 million was recognized for amounts due from a joint venture in FY2023 due to the joint venture's termination of operations[104][113] - A fair value loss of HK$15.2 million on financial assets measured at fair value through profit or loss was recorded during the year, primarily due to minimal recovery prospects for unlisted equity securities[7][106][114] Finance Costs and Taxation Finance costs significantly increased to HK$22.7 million in FY2023 due to rising effective interest rates, while income tax expense decreased to HK$3.1 million due to reduced taxable profit Finance Costs and Income Tax Expense | Item | FY2023 (million HKD) | FY2022 (million HKD) | | :--------------- | :------------------- | :------------------- | | Finance Costs | 22.7 | 10.5 | | Income Tax Expense | 3.1 | 6.3 | - Finance costs significantly increased mainly due to rising effective interest rates during the year[115] - Income tax expense decreased primarily due to reduced taxable profit[143] Loss for the Year The loss for the year attributable to owners of the parent increased to HK$27.8 million in FY2023 Loss for the Year Attributable to Owners of the Parent | Item | FY2023 (million HKD) | FY2022 (million HKD) | | :--------- | :------------------- | :------------------- | | Loss for the Year | (27.8) | (20.6) | Financial Statements Consolidated Statement of Profit or Loss For the year ended March 31, 2023, the Group recorded revenue of HK$265,269 thousand, a slight decrease from HK$267,749 thousand in 2022, with the loss for the year widening to HK$27,781 thousand from HK$23,989 thousand in 2022, mainly due to finance costs and fair value changes of financial assets Consolidated Statement of Profit or Loss Summary | Metric | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------------- | :------------------ | :------------------ | | Revenue | 265,269 | 267,749 | | Loss Before Tax | (24,695) | (17,668) | | Income Tax Expense | (3,086) | (6,321) | | Loss for the Year | (27,781) | (23,989) | | Attributable to Owners of the Parent | (27,781) | (20,633) | | Basic Loss Per Share (HK cents) | (3.1) | (2.3) | Consolidated Statement of Comprehensive Income For the year ended March 31, 2023, the Group's total comprehensive loss widened to HK$27,513 thousand from HK$24,024 thousand in 2022, with other comprehensive income primarily including the release of exchange reserve upon disposal of a subsidiary Consolidated Statement of Comprehensive Income Summary | Metric | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------------- | :------------------ | :------------------ | | Loss for the Year | (27,781) | (23,989) | | Other Comprehensive Income/(Loss) | 268 | (35) | | Total Comprehensive Loss for the Year | (27,513) | (24,024) | | Attributable to Owners of the Parent | (27,513) | (20,651) | Consolidated Statement of Financial Position As of March 31, 2023, the Group's total assets slightly increased to HK$1,108,264 thousand from HK$1,088,910 thousand in 2022, while net current liabilities expanded to HK$184,798 thousand from HK$155,304 thousand, and total equity decreased to HK$160,588 thousand from HK$183,485 thousand Consolidated Statement of Financial Position Summary | Metric | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------------- | :------------------ | :------------------ | | Total Non-Current Assets | 1,069,336 | 1,019,059 | | Total Current Assets | 38,928 | 40,997 | | Assets Held for Sale | - | 28,854 | | Total Assets | 1,108,264 | 1,088,910 | | Total Current Liabilities | 223,726 | 196,301 | | Total Non-Current Liabilities | 723,950 | 676,075 | | Total Liabilities | 947,676 | 905,425 | | Total Equity | 160,588 | 183,485 | | Net Current Liabilities | (184,798) | (155,304) | Notes to the Financial Statements Company and Group Information The Company is an investment holding company primarily engaged in providing elderly care services, incorporated in the Cayman Islands and listed on the Main Board of The Stock Exchange of Hong Kong - The Company is an investment holding company, primarily engaged in providing elderly care services[30] - The Company was incorporated in the Cayman Islands and is listed on the Main Board of The Stock Exchange of Hong Kong[55][78] Basis of Preparation and Accounting Policies The consolidated financial statements are prepared on a going concern basis, adhering to Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, using the historical cost convention except for financial assets measured at fair value, with no significant impact expected from new standards - The consolidated financial statements are prepared on a going concern basis, with directors having reviewed cash flow forecasts and deeming the Group to have sufficient working capital for the next twelve months[31][57] - The ultimate holding company of the Group's major shareholder, Saming Limited, has confirmed its intention to provide financial support for the Group's continued operation[207] - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA and the disclosure requirements of the Hong Kong Companies Ordinance[58] - The financial statements are prepared under the historical cost convention, except for investments in insurance contracts measured at surrender cash value and financial assets measured at fair value through profit or loss[58] - The Group has assessed the impact of new and revised standards and interpretations, expecting no significant impact on its results and financial position[59] Operating Segment Information The Group has only one reportable operating segment, which is the provision of elderly care home and elderly care services, including the sale of related goods, thus no further operating segment analysis is presented - The Group has only one reportable operating segment, which is the provision of elderly care home and elderly care services (including the sale of related goods to provide such services)[84] Revenue, Other Income and Net Gains The Group's total revenue for FY2023 was HK$265,269 thousand, primarily from providing elderly care services and selling age-related goods, with HK$111,501 thousand from the Hong Kong Government's Enhanced Buy-out Scheme, and other income and net gains totaling HK$4,726 thousand, mainly from COVID-19 related rent concessions Revenue Composition | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :----------------------- | :------------------ | :------------------ | | Provision of elderly care services | 233,657 | 237,276 | | Sale of age-related goods | 31,612 | 30,473 | | Total Revenue | 265,269 | 267,749 | - For the year ended March 31, 2023, HK$111,501 thousand of revenue was generated from the Hong Kong Government's Enhanced Buy-out Scheme (2022: HK$110,509 thousand), accounting for over 10% of the Group's revenue[61] Other Income and Net Gains | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :----------------------- | :------------------ | :------------------ | | Bank interest income | 33 | - | | Rental income | 666 | 628 | | COVID-19 related rent concession | 3,910 | - | | Total Other Income | 4,726 | 945 | Loss Before Tax The Group's loss before tax was HK$24,695 thousand, influenced by depreciation, staff costs, finance costs, impairment of receivables from a joint venture, and fair value changes of financial assets, partially offset by government subsidies from the Employment Support Scheme and other sources Loss Before Tax Components | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------------------------------- | :------------------ | :------------------ | | Cost of goods sold and consumables | 19,350 | 17,850 | | Depreciation | 63,711 | 57,247 | | Staff costs (net of government grants) | 115,919 | 117,803 | | Impairment of amounts due from a joint venture | 5,404 | 9,910 | | Fair value changes of financial assets at FVTPL | 15,227 | 63 | | Finance costs | 22,689 | 10,477 | | Government grants from Employment Support Scheme | (7,948) | - | | Other government grants | (10,870) | (12,189) | Income Tax Expense The Group's FY2023 income tax expense significantly decreased to HK$3,086 thousand from HK$6,321 thousand in 2022, primarily due to reduced taxable profit, with Hong Kong profits tax provisioned at 16.5% and eligible subsidiaries taxed at 8.25% for the first HK$2,000,000 of assessable profits Income Tax Expense | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :----------------------- | :------------------ | :------------------ | | Current — Hong Kong | 4,709 | 5,594 | | Under/(Over) provision in prior years | 580 | (54) | | Deferred | (2,203) | 781 | | Total Tax Expense for the Year | 3,086 | 6,321 | - Hong Kong profits tax is provided at a rate of 16.5% on the estimated assessable profits arising in Hong Kong during the year[67] - Under the two-tiered profits tax regime, eligible subsidiaries are taxed at 8.25% on the first HK$2,000,000 of assessable profits[67] Dividends The Board does not recommend the payment of a dividend for the year ended March 31, 2023 (2022: nil) - The Board does not recommend the payment of a dividend for the year ended March 31, 2023 (2022: nil)[88] Loss Per Share For the year ended March 31, 2023, basic loss per share attributable to owners of the parent widened to 3.1 HK cents from 2.3 HK cents in 2022, with no adjustment for dilutive potential ordinary shares as share options were anti-dilutive Loss Per Share | Metric | 2023 (HK cents) | 2022 (HK cents) | | :--------------- | :-------------- | :-------------- | | Basic and Diluted Loss Per Share | (3.1) | (2.3) | - The basic loss per share amount is calculated based on the loss for the year attributable to ordinary equity holders of the parent of HK$27,781 thousand (2022: HK$20,633 thousand) and the weighted average number of ordinary shares in issue of 902,880,000 shares during the year[89] - No adjustment has been made to the basic loss per share amount presented as the Group had no potential dilutive ordinary shares in 2023 due to the Company's share options being anti-dilutive[68] Property, Plant and Equipment For the year ended March 31, 2023, the Group added HK$145,013 thousand in property, plant and equipment, including HK$96,314 thousand in right-of-use assets, with land and buildings totaling HK$598,959 thousand pledged as collateral for general banking facilities Additions to Property, Plant and Equipment | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------------- | :------------------ | :------------------ | | Total Additions | 145,013 | 261,626 | | Of which: Right-of-use assets | 96,314 | 204,663 | - As of March 31, 2023, the Group's land and buildings with a total carrying amount of HK$598,959 thousand (2022: HK$617,313 thousand) were pledged as collateral for the Group's general banking facilities[68] Trade Receivables As of March 31, 2023, the Group's total trade receivables increased to HK$10,057 thousand from HK$7,762 thousand in 2022, with most receivables aged within three months Ageing Analysis of Trade Receivables | Ageing | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------- | :------------------ | :------------------ | | Within 1 month | 4,247 | 2,958 | | 1 to 2 months | 3,352 | 3,155 | | 2 to 3 months | 2,450 | 1,001 | | Over 3 months | 8 | 648 | | Total | 10,057 | 7,762 | Goodwill As of March 31, 2023, the Group's net carrying amount of goodwill remained stable at HK$33,833 thousand, consistent with 2022 Net Carrying Amount of Goodwill | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------- | :------------------ | :------------------ | | Cost | 33,833 | 33,833 | | Accumulated Impairment | - | - | | Net Carrying Amount | 33,833 | 33,833 | Trade Payables As of March 31, 2023, the Group's total trade payables increased to HK$3,088 thousand from HK$1,272 thousand in 2022, with trade payables being non-interest bearing and generally having a 30-day payment term Ageing Analysis of Trade Payables | Ageing | 2023 (thousand HKD) | 2022 (thousand HKD) | | :------- | :------------------ | :------------------ | | Within 1 month | 3,088 | 1,272 | - Trade payables are non-interest bearing and generally have a 30-day payment term[72] Share Capital As of March 31, 2023, the Company's issued and fully paid share capital was HK$9,029 thousand, comprising 902,880,000 ordinary shares of HK$0.01 each, consistent with 2022 Share Capital Structure | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--------------- | :------------------ | :------------------ | | Authorized Share Capital | 50,000 | 50,000 | | Issued and Fully Paid Share Capital | 9,029 | 9,029 | - The issued and fully paid share capital consists of 902,880,000 ordinary shares of HK$0.01 each[73] Disposal of a Subsidiary In March 2022, the Group entered into a sale and purchase agreement with Yada International Group (Hong Kong) Limited to dispose of a 49% interest in Pine Care Yada Hong Kong and a 100% interest in Yada China, with the disposal completed in April 2022, resulting in the release of an exchange reserve of HK$268 thousand in FY2023 - The Group held a 51% interest in Pine Care Yada Elderly Care Services Limited ('Pine Care Yada Hong Kong'), which established a wholly-owned subsidiary in Zhejiang Province, China ('Yada China')[96] - In March 2022, the Group entered into a sale and purchase agreement with Yada Hong Kong to purchase 49% of Pine Care Yada Hong Kong and dispose of 100% of Yada China for a cash consideration of HK$100[73] - The disposal was completed in April 2022, resulting in the release of an exchange reserve of HK$268 thousand in FY2023[46][49][97] Events After the Reporting Period On April 12, 2023, the Group entered into lease agreements for two elderly care homes with total basic rent of approximately HK$87.5 million, which was treated as an adjusting event, recognizing a right-of-use asset of HK$77.6 million in the consolidated statement of financial position as of March 31, 2023 - On April 12, 2023, the Group entered into lease agreements with a third party for the continued leasing of two elderly care homes operated by the Group, with total basic rent payable of approximately HK$87.5 million[98] - This lease agreement relates to the renewal of existing leases and is considered an adjusting event[98] - The Group recognized a right-of-use asset of HK$77.6 million as a lease modification in the consolidated statement of financial position as of March 31, 2023[98] Liquidity, Financial and Capital Resources Net Assets As of March 31, 2023, the Group's net assets decreased to HK$160.6 million from HK$183.5 million in 2022, while adjusted consolidated net assets were HK$1,012.9 million, including an illustrative revaluation surplus of HK$852.3 million for land and buildings Net Assets | Item | 2023 (million HKD) | 2022 (million HKD) | | :--------- | :----------------- | :----------------- | | Net Assets | 160.6 | 183.5 | Adjusted Consolidated Net Assets | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :----------------------- | :------------------ | :------------------ | | Net Assets | 160,588 | 183,485 | | Illustrative Revaluation Surplus of Land and Buildings | 852,341 | 917,961 | | Adjusted Consolidated Net Assets | 1,012,929 | 1,101,446 | - Adjusted consolidated net assets were HK$1,012.9 million, after incorporating an illustrative revaluation surplus of HK$852.3 million (representing a premium over the total valuation of HK$1,451.3 million) for the Group's land and buildings with a carrying amount of HK$599.0 million as of March 31, 2023[173] Liquidity Ratios As of March 31, 2023, the Group's cash and bank balances were HK$23.4 million, net current liabilities were HK$184.8 million, and the current ratio remained at approximately 0.2 times, with the expansion of net current liabilities primarily due to increased debt financing for the Pine Care Place project Liquidity Ratios | Metric | 2023 (million HKD) | 2022 (million HKD) | | :--------------- | :----------------- | :----------------- | | Cash and Bank Balances | 23.4 | 29.1 | | Net Current Liabilities | 184.8 | 155.3 | | Current Ratio | 0.2 times | 0.2 times | - The expansion of net current liabilities was mainly due to increased debt financing related to the Pine Care Place project in FY2023[149] Borrowings and Capital Structure As of March 31, 2023, the Group's interest-bearing bank borrowings totaled HK$589.6 million, mostly secured by land and buildings, leading to an increased gearing ratio of 52.9% due to debt financing for the Pine Care Place project, while the Company's capital structure remained unchanged - As of March 31, 2023, the Group's interest-bearing bank borrowings amounted to HK$589.6 million[148] - Most interest-bearing bank borrowings are secured by the Group's land and buildings[148] Gearing Ratio | Metric | 2023 | 2022 | | :----------- | :---- | :---- | | Gearing Ratio | 52.9% | 50.9% | - The increase in gearing ratio was mainly due to increased debt financing related to the Pine Care Place project in FY2023[149] - In FY2023, there were no changes to the Company's capital structure, which includes ordinary shares and other reserves[121] Capital Expenditure Total capital expenditure for FY2023 was HK$39.3 million, primarily allocated to renovation works for Pine Care Place and other elderly care homes Total Capital Expenditure | Item | FY2023 (million HKD) | FY2022 (million HKD) | | :--------------- | :------------------- | :------------------- | | Total Capital Expenditure | 39.3 | 40.2 | - Capital expenditure was primarily used for renovation works for Pine Care Place and elderly care homes[178] Significant Acquisitions and Disposals Except as disclosed in Note 14 of this announcement, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, and joint ventures in FY2023 - Except as disclosed in Note 14 of this announcement, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, and joint ventures in FY2023[152] Significant Investments Held The Group did not hold any significant investments in FY2023 - The Group did not hold any significant investments in FY2023[153] Commitments and Contingent Liabilities As of March 31, 2023, the Group had no commitments or significant contingent liabilities - As of March 31, 2023, the Group had no commitments[154] - As of March 31, 2023, the Group had no significant contingent liabilities[181] Pledge of Assets As of March 31, 2023, land and buildings and construction in progress with a total carrying amount of HK$599.0 million, along with insurance contract investments with a carrying amount of HK$3.5 million, were pledged as collateral for the Group's general banking facilities - As of March 31, 2023, land and buildings and construction in progress with a total carrying amount of HK$599.0 million (March 31, 2022: HK$617.3 million), and insurance contract investments with a carrying amount of HK$3.5 million (March 31, 2022: HK$3.4 million) were pledged as collateral for the Group's general banking facilities[179] Future Investment Plans Except for business projects disclosed in the "Chairman's Statement" section, the Group had no specific future plans for significant investments or capital assets as of March 31, 2023, and will fund these projects with internal resources and available bank financing - Except for business projects disclosed in the "Chairman's Statement" section, as of March 31, 2023, the Group had no specific future plans for significant investments or capital assets[180] - The Group will fund these business projects with internally generated funds and available bank financing[180] Risk Management Interest Rate Risk The Group's interest rate risk primarily relates to bank loans indexed to HIBOR or prime lending rates, managed by closely monitoring rate changes and reviewing bank facilities, without using interest rate swaps for hedging - The interest rate risk assumed by the Group primarily relates to its bank loans bearing interest at HIBOR or prime lending rates[182] - The Group mitigates risk by closely monitoring changes in interest rates and reviewing its bank facilities regularly[182] - The Group does not use any interest rate swaps to hedge interest rate risk[182] - As of March 31, 2023, if borrowing interest rates were to reasonably increase/decrease by 75 basis points, the profit after tax for the year would decrease/increase by HK$3.7 million due to increased/decreased bank borrowing interest expense[157] Liquidity Risk The Group aims to balance funding continuity and flexibility through bank loans and has established bank facilities for contingencies - The Group's objective is to achieve a balance between funding continuity and flexibility through the use of bank loans[158] - The Group has arranged bank facilities for contingency purposes[158] Credit Risk The Group transacts only with recognized and reputable third parties, conducts credit assessments for all credit-term customers, continuously monitors receivable balances, and has no high concentration of credit risk related to financial assets - The Group only transacts with recognized and reputable third parties[159] - All customers intending to transact on credit terms undergo a credit assessment process, and receivable balances are continuously monitored[159] - The Group has no high concentration of credit risk related to its financial assets[183] Foreign Exchange Risk The Group does not face significant foreign exchange risk and therefore has no foreign exchange hedging policy - The Group does not face significant foreign exchange risk, and therefore has no foreign exchange hedging policy[184] Employees and Remuneration Policy Employees and Remuneration Policy As of March 31, 2023, the Group had 488 full-time and part-time employees with staff costs of HK$134.7 million, committed to competitive, performance-linked remuneration, and has adopted a share option scheme to attract and retain talent, with director remuneration determined by the Remuneration Committee based on experience, responsibilities, workload, time commitment, operating results, and market data Employee Count and Costs | Item | As of March 31, 2023 | As of March 31, 2022 | | :--------- | :------------------- | :------------------- | | Number of Employees | 488 | 504 | | Staff Costs (excluding government grants) | HK$134.7 million | HK$130.0 million | - The Group is committed to ensuring that employee remuneration levels are competitive, linked to performance, and referenced against the Group's profitability, prevailing industry remuneration benchmarks, and market conditions[186] - The Group has adopted a share option scheme to encourage eligible participants to enhance individual performance and efficiency for the Group's benefit, thereby attracting and retaining talent[162] - Director remuneration packages are reviewed by the Remuneration Committee and approved by the Board, determined based on the relevant director's experience, responsibilities, workload, time devoted to the Group, the Group's operating results, and comparable market data[187] Other Information Final Dividend Due to the Group's anticipated rapid business expansion and development requiring sufficient working capital for project reserves, the Directors do not recommend paying a final dividend for FY2023 (FY2022: nil) - Due to the Group's anticipated rapid business expansion and development, sufficient working capital is required as reserves for its project development[164] - The Directors do not recommend the payment of a final dividend for FY2023 (FY2022: nil)[164] Annual General Meeting The Company's Annual General Meeting will be held on Tuesday, August 22, 2023, at 2:30 p.m., with share transfer registration suspended from August 17 to August 22, 2023, to determine eligibility for attendance and voting - The Company's Annual General Meeting will be held on Tuesday, August 22, 2023, at 2:30 p.m.[195] - To determine eligibility to attend and vote at the 2023 Annual General Meeting, the Company will suspend share transfer registration from Thursday, August 17, 2023, to Tuesday, August 22, 2023 (both dates inclusive)[165] Compliance with Corporate Governance Code The Board believes the Company complied with the Corporate Governance Code in FY2023, except for Code Provision F.2.2 regarding the Chairman's attendance at the Annual General Meeting - The Board believes that the Company has complied with the code provisions set out in Part 2 of Appendix 14 to the Listing Rules, the Corporate Governance Code, for FY2023[191] - The sole exception is Code Provision F.2.2, which stipulates that the chairman of the Board should attend the issuer's annual general meeting, but Mr. Tang Yiu Sing, the then Chairman of the Company, was unable to attend the AGM held on August 23, 2022, due to other commitments[166][191] Auditor's Scope of Work PricewaterhouseCoopers, the Company's external auditor, has agreed the figures in this announcement's consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of comprehensive income, and related notes for FY2023 with the draft consolidated financial statements, but this work does not constitute an assurance engagement - PricewaterhouseCoopers, the Company's external auditor, has agreed the figures in this announcement's consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of comprehensive income, and related notes for the Group for FY2023 with the figures in the Group's draft consolidated financial statements for FY2023[192] - The work performed by PricewaterhouseCoopers in this regard does 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 HKICPA[192] Audit Committee The Audit Committee, comprising four independent non-executive directors, reviewed the Group's key accounting policies, discussed risk management, internal controls, and financial reporting matters, including the FY2023 consolidated financial statements, with management - The Audit Committee, comprising four independent non-executive directors of the Company, reviewed the Group's key accounting policies with management and discussed risk management, internal controls, and financial reporting matters, including the review of the Group's consolidated financial statements for FY2023[193] Purchase, Sale or Redemption of Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during FY2023 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during FY2023[200] Publication of Annual Results Announcement and Annual Report This announcement has been published on the HKEX and Company websites, and the Company's FY2023 annual report, containing all relevant information required by the Listing Rules, will be dispatched to shareholders and published on the HKEX and Company websites in due course - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.pinecaregroup.com)[169](index=169&type=chunk) - The Company's FY2023 annual report, containing all relevant information required by the Listing Rules, will be dispatched to the Company's shareholders and published on the HKEX and Company websites in due course[169]