Financial Performance - The company reported revenue of HKD 111,160,000 for the year, a decrease of 22.4% from HKD 143,233,000 in the previous year[20]. - The net loss for the year was HKD 270,792,000, compared to a loss of HKD 683,448,000 in the previous year, indicating a significant reduction in losses[20]. - For the fiscal year ending June 30, 2024, the company recorded revenue of approximately HKD 111,160,000, a decrease of about 22.4% compared to HKD 143,233,000 in 2023[39]. - The gross profit margin for the fiscal year ending June 30, 2024, was approximately 64.5%, down from 73.8% in 2023, primarily due to revenue decline linked to litigation affecting certain areas of the Jiachao Shopping Center[39]. - The company incurred a loss of approximately HKD 270,792,000 for the fiscal year ending June 30, 2024, significantly reduced from a loss of HKD 683,448,000 in 2023, with a loss ratio of 243.6% compared to 477.2% in the previous year[40]. - The fair value change loss of investment properties, including Jiachao Shopping Center and Shopping Center C, decreased significantly by approximately HKD 260,870,000 for the fiscal year ending June 30, 2024, compared to HKD 720,225,000 in 2023[40]. - The company reported a basic and diluted loss per share of HKD 10.07, compared to HKD 25.42 in the previous year, showing an improvement in loss per share[165]. - The total equity attributable to shareholders turned negative at HKD (7,938,000) compared to HKD 268,442,000 in the previous year, indicating a significant decline in shareholder equity[167]. Property Operations - The company is focusing on property operations to enhance development potential and shareholder returns, aiming to become a light-asset and service-oriented property operator[20]. - The rental area of the Jiachao Shopping Center was reduced from 125,188.32 square meters to 74,655.84 square meters as of June 22, 2024[21]. - Approximately 87.5% of the leasable area in the Jiachao Shopping Center has been rented out for retail, restaurants, and entertainment purposes as of June 30, 2024[21]. - The C Zone of the shopping center has a total area of approximately 80,118 square meters, with about 85.0% of the leasable area rented out as of June 30, 2024[22]. - The company operates two shopping centers, which allows for minimal additional operational costs and potential for significant income from leasing, management, and operational services[23]. - The management of both shopping centers is expected to positively impact customer traffic and tenant quality, contributing to positive revenue and profit margins in property operations[23]. - The company expanded its property operations by leasing 42 units in Zhengzhou Yingrui Property Services Co., Ltd., with 73.2% of the leasable area rented out for various commercial purposes[28]. - The company plans to enhance its property operations by upgrading leasing categories and expanding tenant types to meet diverse customer needs[28]. Financial Management - The company continues to implement prudent cost management policies to improve operational efficiency and maintain a stable financial condition[30]. - Future business development will focus on existing projects and new opportunities, including partnerships, to broaden revenue sources and enhance profitability[31]. - The company has focused on cost reduction as a key strategy to address business uncertainties arising from the pandemic[37]. - The company has no intention to engage in lending activities, focusing instead on property operations[35]. - The board believes that existing financial resources will be sufficient to meet future expansion plans, with the potential for additional financing if needed[52]. - The group’s cash and bank deposits as of June 30, 2024, were approximately HKD 40,239,000, an increase from HKD 33,152,000 in 2023[50]. - The current ratio improved to approximately 63.3% as of June 30, 2024, compared to 35.2% in 2023, indicating better short-term financial health[50]. - The board is implementing measures to improve operational funding and cash flow, including close monitoring of administrative expenses and operating costs[182]. Governance and Compliance - The board of directors includes both executive and independent non-executive members, with recent changes in appointments noted[64]. - The company has adopted the corporate governance code as per the listing rules, ensuring compliance and enhancing credibility and transparency[82]. - The audit committee has reviewed the effectiveness of the internal control system, concluding it to be effective and sufficient without any significant issues affecting shareholders[88]. - The company has established a strict code of conduct for directors regarding securities trading, ensuring compliance with regulations[83]. - The independent non-executive directors serve a maximum term of nine consecutive years, ensuring board diversity and skill assessment[90]. - The audit committee reviewed the consolidated financial statements for the year ending June 30, 2024, and confirmed compliance with applicable accounting standards and regulations[97]. - The company has implemented a whistleblowing policy to encourage employees to report financial misconduct and other inappropriate behaviors confidentially[89]. Environmental, Social, and Governance (ESG) - The company emphasizes long-term sustainable development in its operations, focusing on effective resource utilization, energy saving, and emission reduction[114]. - The board of directors is responsible for environmental, social, and governance (ESG) performance and regularly reviews sustainability goals and policies[116]. - An annual materiality assessment is conducted to evaluate the importance of ESG issues to stakeholders and identify related risks and opportunities[118]. - The company prioritizes waste reduction, recycling, and sustainable development in its operations[117]. - The group aims to reduce construction waste to 7,000 cubic meters, household waste to 15,000 cubic meters, and kitchen waste to 2,500,000 liters in the future[125]. - The group has established a target for wastewater discharge at 150 kg, consistent with the previous year[125]. - The group recognizes the increasing popularity of new energy vehicles and plans to install charging stations in its shopping centers to accommodate this trend[132]. - The group has implemented measures to monitor and manage emissions from its restaurant tenants, ensuring compliance with national standards[121]. Employee Management - The company has a total of 132 employees, with a gender distribution of 83 males and 49 females, and an average age of 39 years[138]. - The employee turnover rate for the year is 15%, comprising 14 male and 6 female employees, with an average age of 33 years[138]. - The company conducted 15 training sessions during the year, with a total of 208 participants, including 115 males and 93 females, resulting in a male-to-female training participation ratio of 1.2:1[141]. - The company has maintained a zero incident rate for employee injuries and work-related accidents over the past three years, including the reporting period[139]. - The company has implemented a fair promotion mechanism to ensure no discrimination based on age, gender, or geography during hiring[138]. - The company supports employees in obtaining necessary certifications for their positions, such as fire and electrical certificates[140]. Investment Properties - The fair value of the group's investment properties was estimated at approximately HKD 568,817,000 as of June 30, 2024, representing 80% of total assets[155]. - The group recognized a fair value loss of approximately HKD 260,870,000 on investment properties for the year ended June 30, 2024[155]. - The group’s investment properties had a fair value of HKD 995,699,000 in the previous year, indicating a significant decrease in value[155]. - The group’s independent valuation expert conducted the valuation of investment properties, which involved significant unobservable inputs and market assumptions[156]. Credit and Receivables Management - The expected credit loss provision for trade receivables and other receivables, loans, and lease deposits amounted to approximately HKD 4,533,000, HKD 185,951,000, and HKD 107,166,000 respectively as of June 30, 2024[157]. - Management assessed the recoverability of trade receivables and other receivables based on various factors including credit status and historical settlement records[158]. - The company utilized external valuation experts to assist in evaluating the expected credit loss provision and its underlying assumptions[158]. - The total expected credit loss provision is critical due to its significance to the consolidated financial statements and the management's judgment in assessing recoverability[157].
锦艺集团控股(00565) - 2024 - 年度财报