Financial Performance - For the fiscal year ended June 30, 2024, the Group's consolidated revenue decreased by approximately HK$95.2 million or 20.9% from HK$455.6 million to HK$360.4 million[19]. - The loss attributable to owners of the Company was HK$257.3 million, compared to a loss of HK$98.3 million in the previous year[19]. - The substantial decrease in gross profit of approximately HK$109.0 million was mainly due to a write-down of approximately HK$141.0 million for properties under development and properties for sale[19]. - The jewelry segment experienced a decline in revenue due to high inflation and interest rates reducing consumer confidence and purchasing power[19]. - The basic loss per share was HK$37.67 cents, compared to HK$14.39 cents in 2023[19]. - The overall weak economy has compounded the downward pressure on the Group's performance this year[19]. - The property segment faced challenges in purchasing power and the Hong Kong residential and commercial markets[19]. - The Group's operations necessitated a cautious approach to maintain sales momentum amid challenging economic conditions[19]. - The recognition of a loss of approximately HK$87.9 million arose from changes in the fair value of investment properties[19]. - Impairment losses in respect of goodwill, intangible assets, and right-of-use assets amounted to approximately HK$9.8 million[19]. Property Development and Investment - Rental income for the year amounted to approximately HK$22.3 million, an increase of HK$6.6 million from HK$15.7 million in 2023[22]. - The Group holds 75% interest in "One Continental," a 28-storey building with a gross floor area of approximately 86,970 sq.ft, and secured additional quality tenants in the first half of 2024[23]. - "Amber Place" residential development offers 42 units, with sales commencing in July 2024, and 29 units have entered into provisional sales agreements[23]. - The property market recovery is expected to be protracted due to high interest rates and current economic conditions, requiring stakeholders to prepare for a slow recovery phase[24]. - The management team will adopt a more cautious approach to investments and resource allocation, emphasizing thorough due diligence in the current uncertain environment[24]. Financial Position and Liquidity - As of 30 June 2024, the Group's gearing ratio was 0.3619, an increase from 0.3215 in 2023, indicating a rise in financial leverage[30]. - The cash and cash equivalents decreased to HK$49,156,000 (2023: HK$97,101,000), mainly due to finance costs and partial repayment of bank loans[31]. - Bank loans denominated in HK$ amounted to HK$1,024,440,000 (2023: HK$1,036,213,000), secured by various assets including property and equipment[33]. - The Group's total borrowings due to joint ventures and related companies were approximately HK$136,169,000 (2023: HK$122,007,000)[30]. - The Group has sufficient working capital to meet ongoing operational requirements despite the decrease in cash[31]. Corporate Governance and Management - The Company has adopted the Corporate Governance Code and complied with its provisions, except for deviations from C.2.1 and D.2.5[81]. - The Company does not have an internal audit function for the year ended 30 June 2024, but believes that the existing structure provides sufficient internal control and risk management[81]. - The Board comprises five Executive Directors and five Independent Non-executive Directors, with Independent Directors representing over one-third of the Board[82]. - The Company has complied with Listing Rules regarding the appointment of Independent Non-executive Directors, ensuring at least three are appointed and one possesses appropriate professional qualifications[84]. - The Company has established a Remuneration Committee with specific written terms of reference as required by the Code[99]. Share Options and Equity - The 2010 Share Option Scheme had 10,200,000 options outstanding as of June 30, 2024, following a share consolidation[38]. - The 2020 Share Option Scheme was adopted on December 22, 2020, following the expiration of the 2010 Share Option Scheme[37]. - As of June 30, 2024, a total of 13,200,000 share options (after Share Consolidation) have been granted to certain directors and employees at exercise prices of HK$1.38, HK$1.21, HK$2.45, HK$1.49, and HK$0.52[39]. - The total number of shares available for issue under the 2020 Share Option Scheme is 68,311,825 shares, representing 10% of the shares of the Company in issue as of September 25, 2024[57]. - The Company reported a net cash generated from investing activities of HK$5,757, a recovery from a cash outflow of HK$14,216 in 2023[186]. Risk Management and Compliance - The Group employs conservative strategies for financial risk management, keeping market risk at a minimum[60]. - The Company has implemented a Whistleblowing Policy to promote accountability and encourage reporting of misconduct[105]. - The Board has confirmed no significant weaknesses in the risk management and internal control systems as of June 30, 2024[104]. - The Group's risk management and internal control systems are evaluated on an ongoing basis, with systematic reviews based on risk assessments[104]. - The Company has adopted a policy to review its dividend policy periodically, ensuring it remains relevant to the business environment[115]. Environmental and Social Responsibility - The Group maintains high standards of operating practices and complies with stringent jewellery manufacturing standards as a certified member of the Responsible Jewellery Council[134]. - The Group has implemented several policies to encourage employees to save energy and paper, aiming to reduce resources and costs[133]. - The Group's environmental policies aim to promote resource saving and efficient energy use among employees[133]. - The management team actively participates in community service and holds various leadership roles in social organizations, reflecting the Group's commitment to corporate social responsibility[65]. - The Company has committed to fair employment practices and equal opportunities based on skills and abilities[112].
恒和集团(00513) - 2024 - 年度财报