Financial Performance - For the year ended June 30, 2022, the Group recorded revenue of approximately HK$90.05 million, representing an increase of approximately 107.96% compared to HK$43.30 million in 2021[13]. - The loss attributable to owners of the Company for the year amounted to approximately HK$32.89 million, compared to a profit of approximately HK$3.62 million in 2021[13]. - The loss was mainly due to a one-off equity settled share-based transaction of approximately HK$19.06 million and an impairment loss on trade and loan receivables totaling approximately HK$6.20 million[13]. - Revenue from secondary tutoring services segment was approximately HK$1.20 million, representing a decrease of approximately 32.96% compared to HK$1.79 million in 2021[17]. - Revenue from English language training and test preparation courses was approximately HK$77,000, up from approximately HK$63,000 in 2021[19]. - Revenue from directly-owned education centers was approximately HK$19.86 million, reflecting an increase of approximately 26.50% compared to HK$15.70 million in the last financial year[25]. - Revenue from franchised centers remained stable at approximately HK$3.91 million, compared to approximately HK$3.98 million in 2021[25]. - The UFO Group generated revenue of approximately HK$6.43 million from VR products and related services, an increase from approximately HK$0.79 million in the previous year[30]. - Revenue from primary tutoring services, skill courses, and test preparation courses increased to approximately HK$23.77 million, representing a growth of approximately 20.82% from approximately HK$19.67 million in the last financial year[74]. - Revenue from STEAM education services, VR, and digital entertainment amounted to approximately HK$54.04 million from trading gaming products, with additional revenues of approximately HK$6.43 million from VR products and approximately HK$477,000 from STEAM education services[79][85]. Challenges and Risks - The COVID-19 pandemic has significantly impacted the operations of the Group's teaching centers, leading to several suspensions of face-to-face classes[17]. - The management anticipates ongoing challenges due to the pandemic but remains focused on adapting to the changing educational landscape[18]. - The private tutoring industry is highly competitive, with a decrease in student numbers and an increase in small-scale centers intensifying market competition[165]. - Business interruption risk exists due to reliance on rented education centers, with potential adverse effects if leases are not renewed[164]. - The Group recognizes the importance of intellectual property rights protection, with potential litigation risks affecting financial position and brand image[166]. - The Group's business operations are significantly affected by the COVID-19 pandemic, leading to mandatory or voluntary suspensions of education centres if any infections are detected among students or staff[171]. Investments and Acquisitions - The Group completed the acquisition of 60% of UFO Interactive Group Limited, expanding into the Virtual Reality and digital entertainment business[11]. - The Group held significant investments under financial assets at FVOCI, with Gransing Financial Group Limited representing 6.22% of the Group's audited total assets as at 30 June 2022[65]. - The Group acquired listed securities in 22 companies and disposed of securities in 11 companies during the year[50]. - The acquisition of UFO Group is expected to provide complementary effects, particularly in diversifying the company's business and enhancing new learning approaches[108]. Financial Position - The Group's total gross loan and interest receivables amounted to approximately HK$29.95 million, down from HK$42.49 million in 2021[36]. - The largest borrower accounted for approximately HK$10.89 million or 36.36% of the Group's total loan and interest receivables as of June 30, 2022[36]. - The Group recognized expected credit loss allowances on loan and interest receivables amounting to approximately HK$4.46 million, a decrease from HK$12.50 million in 2021[38]. - The annual interest rate of loans granted ranged from 9% to 15%, compared to 10% to 10.5% in the previous year[36]. - The outstanding principal amount of loan receivables as of June 30, 2022, is approximately HK$26.86 million, compared to approximately HK$38.40 million in 2021[49]. - The Group's financial assets at fair value through profit or loss (FVPL) have a fair value of approximately HK$59.27 million, with a loss of approximately HK$6.18 million due to market conditions[50]. - The Group's impairment loss on loans and interest receivables is approximately HK$4,460,000 for the year[49]. Operational Strategies - The Group has been exploring market opportunities to better deploy its resources and connect students with celebrity tutors in a new digital era[18]. - The Group plans to leverage VR, augmented reality, and artificial intelligence technologies from the UFO Group to enhance educational services and expand into international markets[101]. - The Group aims to minimize losses from its joint venture in early education due to adverse conditions caused by COVID-19 and will collaborate closely with partners to develop appropriate strategies[75]. - The Group will continue to seek new quality tutors to reduce revenue concentration from existing tutors[158]. - The Group plans to renew leases in prime locations timely and maintain a portfolio of potential premises for relocation[164]. Employee and Operational Management - The company has recognized an additional impairment loss of approximately HK$4.46 million for loan receivables for the year ended June 30, 2022, compared to approximately HK$12.50 million in 2021[115]. - The Group is committed to providing competitive remuneration packages and career development opportunities to attract and motivate employees[187]. - The Group emphasizes the importance of employee relationships and offers competitive compensation to attract and retain talent[191]. - The Group maintains long-standing relationships with suppliers, primarily tutors, to ensure business sustainability and quality[195]. - The Group has complied with various employment laws to safeguard the health and interests of its employees, ensuring a supportive working environment[185]. Compliance and Sustainability - The Group has taken measures to ensure compliance with regulatory requirements, including ongoing reviews of newly enacted laws and establishing internal control procedures[180]. - The Group is committed to environmental sustainability, implementing green office practices such as double-sided printing and reducing energy consumption[173]. - The Group maintains a proactive approach to environmental practices, integrating health and safety management into its operational processes[178]. - The Group is focused on minimizing the risk of non-compliance with laws that could adversely impact its financial position and business operations[183]. Charitable Activities and Dividends - The Group's charitable donations during the Year amounted to HK$15,000, an increase from HK$3,000 in 2021[197]. - The Board does not recommend the payment of a final dividend for the Year, consistent with 2021 where no dividend was paid[197].
源宇宙教育(01082) - 2022 - 年度财报