Business Performance - The Group faced significant pressure on its business due to a decline in customers' spending power and a surge in northbound consumption in the latter half of 2023[9]. - The overall business environment is expected to become more challenging in the forthcoming year due to uncertainties in Hong Kong's economy and the impact on consumption and tourism[12]. - The Group's revenue for the Reporting Period was approximately HK$89,245,000, representing an increase of approximately 14.4% compared to HK$77,981,000 for the Corresponding Period[16]. - The Group recorded a total comprehensive loss of approximately HK$17,321,000 for the Reporting Period, compared to a profit of approximately HK$5,880,000 for the Corresponding Period[17]. - The increase in operating expenses, including marketing and staff costs, was a significant factor contributing to the loss, outweighing revenue growth[18]. - The revenue generated from the operation of club and entertainment business increased by approximately HK$11,264,000, or approximately 14.4%[28]. - The increase in revenue was primarily due to the relaxation of business hours on a full-year basis during the Reporting Period compared to the Corresponding Period[29]. - The Group's financial performance was impacted by increased property rental and related expenses, including the opening of Wanchai Amante Shop[17]. Operational Changes - A new cigar shop was launched in Wanchai to expand the Group's principal business, alongside two existing lounges: LKF Lounge and Amante House[11]. - The sports-themed bar, Paper Street, ceased operations in March 2024 due to non-renewal of lease[22]. - The nightclub "FAYE" ceased operations on 4 August 2024 due to lease expiration, with the company seeking new venues for its club and restaurant businesses[56]. - The sports-themed bar Paper Street and nightclub Faye closed in March and August 2024, respectively, due to non-renewal of leases, indicating a strategic shift in venue management[66]. Financial Position and Liquidity - As of May 31, 2024, the Group's total cash and bank balances were approximately HK$1,816,000, down from approximately HK$10,589,000 in 2023[40]. - The current ratio decreased to 0.68 from 0.81, primarily due to purchases of property, plant, and equipment for the opening of Wanchai Amante Shop and repayment of lease liabilities[40]. - The Group reported a net loss and significant liabilities primarily due to high administrative expenses, including advertising and marketing costs, and property rental expenses[44]. - The Group entered into a loan facility agreement for HK$30,000,000 for 24 months to support liquidity needs[45]. - An independent third-party lender agreed not to request repayment of outstanding amounts totaling approximately HK$5,652,000 until November 30, 2025[45]. - The management is confident that the Group will have sufficient liquidity to finance operations for the next 18 months, resolving going concern issues[46]. - The rights issue raised approximately HK$12,000,000 (gross proceeds: approximately HK$12,500,000) to support the operation of the new lounge in Lan Kwai Fong[50]. - The placing of new shares raised funds for setting up Amante House and general working capital, with up to 11,985,600 shares placed at HK$0.50 each[50]. Corporate Governance - The company emphasizes high standards of corporate governance, focusing on transparency, independence, accountability, responsibilities, and fairness[80]. - The Board has complied with the CG Code throughout the reporting period, except for the deviation regarding the separation of the roles of Chairman and CEO[81]. - The Board will continue to review its operations to potentially separate the roles of Chairman and CEO in the future to enhance corporate governance independence[82]. - The Board is responsible for formulating strategies, monitoring performance, and managing risks, with three committees assisting in these functions[88]. - The Company believes all INEDs meet the independence guidelines as set out in the GEM Listing Rules[99]. - The Board consists of 4 male directors and 2 female directors, reflecting a commitment to diversity[104]. Employee and Remuneration Policies - The Group employed 149 employees as of May 31, 2024, up from 88 employees in 2023, with a gender ratio of approximately 59.7% male and 40.3% female[64]. - Employee benefit expenses for the Reporting Period amounted to approximately HK$20,809,000, an increase from approximately HK$16,569,000 in 2023, reflecting a growth of about 25.5%[64]. - The Group's remuneration policy aims to attract, retain, and motivate employees through competitive compensation packages, including basic salary and incentive bonuses[106]. - The Group will invest in training, retention, and recruitment programs to enhance staff development and performance evaluation[108]. Environmental, Social, and Governance (ESG) Initiatives - The Board is responsible for the Company's ESG strategy and reporting, ensuring effective management of ESG-related risks[160]. - The ESG Report outlines the Company's commitment to sustainable business operations and compliance with relevant legal standards[161]. - The Group aims to reduce GHG emissions intensity (Scope 1, 2, and 3) by 5% by the year 2028, with the status currently marked as in progress[191]. - The Group's total GHG emissions for the Reporting Period were 152.9 tonnes of CO2e, an increase from 102.2 tonnes in 2023, representing a 49.5% rise[189]. - The Group actively engages with stakeholders to understand their expectations and improve business practices[175]. Risk Management and Internal Controls - The Group's internal control and risk management systems were reviewed and deemed effective and adequate by the Board and Audit Committee[122]. - The internal control review covered material controls, including financial, operational, and compliance controls, and risk management functions[121]. - The improvement of risk management and internal control systems is an ongoing process, with a commitment from the Board to strengthen these areas[124]. - The Audit Committee oversees the internal control system and reports any material issues to the Board[115].
新爱德集团(08412) - 2024 - 年度财报