Accounting and Financial Reporting - The group has implemented the guidelines from the Hong Kong Institute of Certified Public Accountants regarding the accounting treatment of long service payment liabilities, with no significant impact on the consolidated financial statements as assessed by management[1]. - The consolidated financial statements for the year ending March 31, 2024, include the financial statements of the company and its subsidiaries, as well as the group's interests in joint ventures[3]. - Fair value measurements are categorized into three levels based on the observability of input data, with Level 1 being quoted prices in active markets for identical assets or liabilities[6]. - The group’s financial statements include the performance of subsidiaries and joint ventures from their respective acquisition dates until March 31, 2024, or the date of sale[7]. - Non-controlling interests are presented separately in the consolidated statement of financial position and in the consolidated income statement, reflecting the share of profit or loss attributable to non-controlling interests[10]. - Investments in subsidiaries are accounted for at cost less any impairment losses, starting from the date control is obtained[11]. - Investments in joint ventures are accounted for using the equity method, with initial recognition at cost and subsequent adjustments based on the group's share of the joint venture's net assets[12]. - Investment properties are held for rental income and/or capital appreciation, initially measured at cost and subsequently at fair value[16]. - Gains or losses arising from changes in the fair value of investment properties are recognized in profit or loss for the period in which they occur[18]. Financial Performance - For the fiscal year ending March 31, 2024, the group recorded a revenue of HKD 249,500,000, an increase of 4.7% compared to HKD 238,400,000 in the previous year[31]. - Operating profit for the fiscal year was HKD 174,500,000, up 10.7% from HKD 157,600,000 in the prior year[31]. - The group reported a net loss of HKD 49,600,000 for the twelve-month period, compared to a profit of HKD 64,400,000 in the previous year[31]. - Shareholders' attributable net loss was HKD 56,200,000, compared to a profit of HKD 59,800,000 in the previous year[31]. - The group's financial costs increased significantly from HKD 69,000,000 to HKD 121,700,000 due to rising interest rates[31]. - The group’s investment properties experienced a fair value decrease of HKD 12,000,000, compared to a gain of HKD 6,000,000 in the previous year[31]. Market and Economic Conditions - The tourism industry in Thailand is recovering well, with over 27 million visitors in 2023 and an expected 37 million in 2024, nearing pre-pandemic levels[31]. - The group faced challenges in the Hong Kong commercial office sector due to declining rental rates and occupancy[31]. - The geopolitical issues and slower-than-expected economic recovery in China continued to impact the Hong Kong economy negatively[31]. - The government projects that the number of tourists in Hong Kong will reach 46 million in 2024, a 35% increase from 2023, but only 70% of the 2018 levels[66]. - The group anticipates that the Hong Kong Regal Hotel will require additional funding to cover negative cash flow due to slow recovery in inbound tourism[66]. - The group remains optimistic about the continued strong recovery in Thailand's tourism sector, expecting tourist numbers to exceed 90% of 2019 levels in 2024[66]. Credit Risk and Financial Assets - The financial assets are classified as held for trading if they are primarily acquired for short-term sale purposes or are part of a portfolio managed for short-term profit[41]. - The group recognizes expected credit losses for financial assets, including receivables and cash balances, based on changes in credit risk since initial recognition[48]. - The expected credit loss amount is updated at each reporting date to reflect changes in credit risk, with a full expected credit loss representing potential losses over the life of the financial instrument[48]. - The group assumes that credit risk significantly increases when contractual payments are overdue by more than 30 days, unless there is reasonable evidence to the contrary[51]. - Financial assets overdue by more than 90 days are considered to have defaulted, unless there is reasonable evidence suggesting a more delayed default condition[52]. - Interest income from financial assets measured at amortized cost is recognized using the effective interest method, excluding credit-impaired financial assets[44]. - Equity instruments designated as measured at fair value through other comprehensive income are subsequently measured at fair value, with gains and losses recognized in other comprehensive income[45]. - Financial assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss[46]. - The group evaluates whether credit risk has significantly increased by comparing the risk of default at the reporting date to the risk at initial recognition[49]. - The assessment of significant increases in credit risk considers various quantitative and qualitative data, including external or internal credit ratings and market indicators[50]. Revenue and Rental Income - The rental income from the Jian Sheng Plaza in Hong Kong increased to HKD 48,200,000 for the fiscal year, compared to HKD 44,200,000 in 2023, reflecting a growth of 4.5%[57]. - The average occupancy rate of the Hong Kong Regal Hotel was 45% for the fiscal year, with an average daily room rate of HKD 4,212, leading to total revenue of HKD 564,600,000, up from HKD 77,300,000 in 2023[59]. - The Pullman Bangkok Hotel G reported revenue of THB 542,700,000 (approximately HKD 118,400,000) for the fiscal year, an increase from THB 400,700,000 (approximately HKD 91,000,000) in 2023, with an operating profit of THB 178,300,000 (approximately HKD 38,900,000)[62]. - The occupancy rate for Pullman Bangkok Hotel G improved to 76%, up from 55% in 2023[62]. - The average occupancy rate for Pullman Pattaya Hotel G was 79%, an increase from 73% in 2023, with revenue reaching THB 420,800,000 (approximately HKD 91,800,000)[62]. - The company’s rental income from the property in Central Hong Kong was HKD 60,700,000, slightly up from HKD 56,900,000 in 2023, despite a decrease in fair value[57]. Investments and Joint Ventures - The group’s hotel investments are entirely made through joint ventures, indicating a strategic focus on collaborative investments[35]. - The company recorded a loss of HKD 20,500,000 from its investment in a joint venture due to currency depreciation and fair value adjustments[57]. - The company’s share of losses from the Regal Hotel joint venture amounted to HKD 137,100,000, primarily due to increased loan rates and pre-opening expenses[59]. - The company’s investment in the Tokyo properties is valued at JPY 95 billion, with an investment cost of JPY 84 billion[57]. - The group received a cash distribution of $8,900,000 from its non-listed associate company, Strand Hotels International Limited, and recorded a share of profits from the associate of HKD 27,600,000 for the fiscal year[63]. - The group’s investments in associates in Thailand, China, and Japan had book values of HKD 361,800,000, HKD 207,300,000, and HKD 89,300,000 respectively as of March 31, 2024[66]. Corporate Governance and Compliance - The company has a robust governance structure with independent directors and a focus on sustainable development[1]. - The board is focused on compliance with legal and regulatory requirements, employing external advisors for guidance[131]. - The company values effective communication with employees and promotes equal opportunity in hiring and development[133]. - The company has maintained appropriate directors and officers liability insurance during the fiscal year to provide adequate protection against legal actions[169]. - The independent non-executive directors confirmed that the related party transactions were conducted in the ordinary course of business and on normal commercial terms[180]. Employee and Community Engagement - As of March 31, 2024, the group had a total of 18 salaried employees, an increase from 17 employees as of March 31, 2023[163]. - The group made charitable and other donations of approximately HKD 369,000 in the fiscal year, down from HKD 748,000 in 2023[164]. - The group ensures competitive compensation for its employees, with salaries determined based on performance and the company's compensation and bonus policies[163]. - The company actively participates in community and educational initiatives, enhancing its corporate social responsibility profile[1]. Shareholder Information - The company has a total of 528,683,206 shares held by its directors, with the largest individual holding being 312,914,946 shares, representing 45.81%[114]. - Forward Investments Inc. holds 283,200,215 shares, representing 24.54% of the company[123]. - Intercontinental Enterprises Corp. owns 215,768,260 shares, accounting for 18.70% of the company[123]. - The company has no unexercised share options as of March 31, 2024, and no arrangements for directors to benefit from purchasing shares or bonds[166]. - The company has sufficient public float as of the date of the annual report publication[171]. - The company has no plans to purchase, sell, or redeem any of its listed shares during the year[174]. - The company has no directors with interests in any business that competes or may compete with the group[175]. - The company has not entered into any significant transactions, arrangements, or contracts during the fiscal year[168]. Taxation and Deferred Tax - The deferred tax liabilities are calculated based on taxable temporary differences related to investments in subsidiaries and associates, reflecting the company's tax strategy[3]. - The company has established significant deferred tax assets, which are only recognized when there is sufficient taxable profit to utilize the temporary differences[4]. - The financial statements indicate that the current and deferred tax liabilities are recognized in the profit and loss statement, ensuring transparency in financial reporting[5]. Other Financial Information - The total bank borrowings of the group as of March 31, 2024, amounted to HKD 2,281,000,000, unchanged from the previous year[66]. - The group's total liabilities to total assets ratio was 20.7% as of March 31, 2024, compared to 20.5% the previous year[66]. - The group holds cash and bank balances of HKD 302,500,000 as of March 31, 2024, an increase from HKD 262,800,000 the previous year[66]. - The group’s total distributable reserves as of March 31, 2024, amounted to HKD 1,259,265,000, slightly up from HKD 1,258,559,000 the previous year[76]. - The company entered into a new lease agreement in May 2022, extending the rental terms for properties at HKD 676,480 and HKD 132,755 per month, respectively, for three years[176]. - The company has raised seven Asian mixed funds, three US funds, one Vietnam fund, two hotel funds, and one growth equity fund since 2005, totaling significant capital for real estate investments[1]. - The financial director has been with the group since 2000, indicating a long-term commitment to financial management and strategy[2]. - The financial director holds multiple degrees, including an MBA, showcasing a strong educational background in finance and engineering[2]. - The management team has extensive experience in international capital markets and investment banking, providing a strong foundation for strategic decision-making[4].
建生国际(00224) - 2024 - 年度财报