Financial Reporting and Accounting Policies - The group has applied the initial recognition exception and has not recognized deferred tax assets and liabilities for temporary differences related to lease transactions[2]. - The group has conducted a detailed assessment of the impact of the amendments to Hong Kong Accounting Standard No. 12, expecting no significant impact on the financial statements[2]. - The group recognizes lease liabilities for rental payments and right-of-use assets for the right to use related assets[23]. - Investment properties are initially measured at cost, including transaction costs, and subsequently reported at fair value reflecting market conditions at the end of the reporting period[19]. - The group applies a single recognition and measurement approach for all leases, except for short-term leases[26]. - The recoverable amount of assets is estimated when impairment indicators arise, with the recoverable amount being the higher of the asset's value in use or fair value less costs to sell[13]. - Financial assets are classified upon initial recognition as subsequently measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss[28]. - The group confirms that any gains or losses on financial assets measured at amortized cost will not be reclassified to profit or loss[31]. - The group will capitalize significant inspection expenditures as assets when they meet recognition criteria[17]. - The group recognizes any impairment losses related to goodwill, which cannot be reversed in subsequent periods[8]. - The company recognizes expected credit losses in two stages, with a provision for 12-month expected credit losses for credit risks that have not significantly changed since initial recognition[36]. - Financial liabilities are initially recognized at fair value, and loans and borrowings are measured at fair value less direct transaction costs[40]. - The company measures investment properties at fair value, with gains or losses from fair value changes included in the income statement for the year[42]. - Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell[43]. - The company assesses whether a contract is a lease at the start of the contract, recognizing right-of-use assets at the lease commencement date[46]. - Expected credit losses are determined based on the difference between contractual cash flows due and the expected cash flows to be received[58]. - Financial assets are classified and measured based on the business model for managing those assets, with specific classifications for amortized cost and fair value[52]. - The company applies a simplified approach for measuring expected credit losses for trade receivables[60]. - Financial liabilities are subsequently measured at amortized cost using the effective interest method unless derecognized[62]. - The income tax includes current tax and deferred tax, with deferred tax liabilities recognized based on temporary differences between the tax base and the carrying amounts of assets and liabilities[67][68]. - Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized[69]. - The company has established a provision matrix based on historical credit loss experience, adjusted for specific forward-looking factors and economic conditions[79]. - Financial liabilities include trade payables, other payables, accrued liabilities, and loans, with subsequent measurement based on their classification[80]. - The company applies a simplified approach to calculate expected credit losses for financial instruments without significant financing components[79]. - The recognition of income from customer contracts is based on the transfer of control of goods or services to customers, with variable consideration estimated at contract inception[72][74]. - The company has a policy for recognizing deferred tax liabilities for all taxable temporary differences, with certain exceptions for investments in subsidiaries and joint ventures[88]. - The financial statements are prepared based on the tax rates and laws enacted or substantively enacted at the reporting date[70][86]. - The company evaluates the recoverability of deferred tax assets at each reporting date, adjusting the carrying amount if it is no longer probable that sufficient taxable profits will be available[89]. - Revenue is recognized when control of goods or services is transferred to customers, reflecting the expected consideration for the exchange[92]. - Interest income is recognized using the effective interest method, accurately discounting future cash income to the net value of financial assets[94]. - Contract liabilities are recognized as revenue when the group fulfills its performance obligations, transferring control of goods or services to customers[109]. Corporate Governance and Board Diversity - The company has adopted a board diversity policy, considering various criteria such as gender, age, and professional experience for board member appointments[56]. - The company is committed to enhancing board diversity and will actively seek suitable candidates to maintain or improve the current level of female representation[118]. - The board consists of 1 female and 7 male directors, with a gender ratio of approximately 1:0.77 among all employees as of March 31, 2023[118]. - The board has 4 directors aged 50-59, 2 aged 60-69, 1 aged 70-79, and 1 aged 80 or above, indicating a diverse age distribution[118]. - The company has established a nomination committee to assess the independence of non-executive directors and review board composition[113]. - The company aims to provide fair market-level compensation to retain and attract high-quality directors[127]. - The audit committee held two meetings during the year, with the independent auditor attending all meetings to review financial reports and internal controls[133]. - The independent auditor, Ernst & Young, was paid a total of HKD 4,752,000 for audit and non-audit services during the year[120]. Financial Performance and Dividends - The company reported a net profit of HKD 8,448 million for the fiscal year 2022/23, compared to HKD 7,994 million in the previous year, representing a growth of approximately 5.7%[139]. - Earnings per share for 2023 was HKD 14.50, a slight decrease from HKD 15.32 in 2022[139]. - The board proposed a final dividend of HKD 0.05 per share for the year ending March 31, 2023, consistent with the previous year's dividend[147]. - The company has adopted a dividend policy that maintains sufficient cash reserves to meet operational needs and future business growth[145]. - The board will review its dividend policy periodically and has the discretion to declare dividends based on various factors[123]. Operational Highlights and Property Management - The company is actively involved in property development and investment projects in mainland China, including the Beijing South Road project[150]. - The company emphasizes compliance with insider trading policies and provides regular updates to ensure regulatory adherence[143]. - The average occupancy rate for the Hong Kong Tower building was approximately 93% during the year, compared to 98% in 2022, generating stable rental income[151]. - The company is engaged in various property renovation projects, including the redevelopment of the NEXXUS project in Jing'an[150]. - For the fiscal year ending March 31, 2023, the group recorded consolidated revenue of HKD 1,066,000,000, a slight decrease from HKD 1,113,000,000 in 2022, primarily due to reduced property sales[164]. - The net profit attributable to shareholders was HKD 33,000,000, down from HKD 56,000,000 in the previous year, impacted by increased financial costs and reduced profits from associated companies[164]. - The group delivered property unit revenue of HKD 580,000,000 for the year, compared to HKD 633,000,000 in 2022, with nearly all units sold since the project's market launch in 2013[173]. - As of March 31, 2023, the group had contracted but unrecognized property sales amounting to RMB 363,000,000, expected to be recognized in the fiscal year 2023/2024[173]. - The group managed 25 parking facilities as of March 31, 2023, an increase from 23 the previous year, with a total of approximately 2,090 parking spaces[183]. - The average occupancy rate for the serviced apartments remained stable at around 90% despite challenges faced by the hotel business due to COVID-19 restrictions[175]. - The group acquired a property in Shanghai's Jing'an District in 2022 to diversify its investment portfolio and generate rental income[168]. - The Beijing South Road project has a total floor area of approximately 77,700 square meters, including a residential building with 162 units for sale and an office building primarily held as an investment property[169]. - The Digital Realty Kin Chuen data center, a strategic investment project, has maintained an average occupancy rate of about 90% since its service commencement in 2021[179]. - The group plans to complete a large mixed-use project along Beijing Road in Guangzhou by 2024, which will include residential units and commercial facilities[190]. - The overall occupancy rate of the property in Shenzhen increased to 68% as of March 31, 2023, compared to 64% in the same period of 2022, and the average occupancy rate for the entire year was 63%, up from 52% in 2022[193]. - The property generated total sales and rental income of HKD 359 million for the year ending March 31, 2023, down from HKD 601 million in 2022[196]. - The average occupancy rate of the Chongqing Hanguo Center was 80% for the review year, down from 88% in 2022[198]. - The Chongqing Jinshan Commercial Center achieved an overall average occupancy rate of 84% during the year, an increase from 75% in 2022[198]. - The total floor area of the property in Shenzhen is approximately 128,000 square meters, featuring a 75-story high-end building[193]. - The Qiaochengfang project, in which Hanguo Group holds a 20% stake, has a total floor area of approximately 224,500 square meters[196]. - The Chongqing Hanguo Center has a total floor area of approximately 108,000 square meters[198]. - The Chongqing Jinshan Commercial Center has a total floor area of approximately 173,000 square meters, including a 41-story office building and a 42-story hotel[198]. - The Shenzhen property received LEED Gold certification in 2019, emphasizing sustainable development and green building features[193]. - The remaining residential units of the Qiaochengfang project continue to be launched for market sale[196].
建业实业(00216) - 2023 - 年度财报