Business Expansion and Services - In fiscal year 2022, the company expanded its extracurricular personal quality courses for children and teenagers, covering sports, arts, and dance[8]. - The company opened a consultation center in Zhengzhou, Henan Province, to provide overseas education consulting services and acquired a school in the UK to enhance its overseas school network[8]. - Future plans include expanding overseas education consulting services to major cities in mainland China and Hong Kong through mergers, collaborations, and new establishments[8]. - The company aims to leverage its UK school network to promote Chinese students studying in the UK and explore overseas research and study programs[8]. - The company intends to expand dance training courses to Beijing and seek more business development opportunities[8]. - The company aims to create a one-stop service for Chinese students seeking international education opportunities[14]. - The company plans to enhance its market development efforts while maintaining service quality for existing clients and actively expanding its new client base[8]. - The company has shifted its focus from academic education to non-academic education and training consulting, which has begun to significantly contribute to its revenue[21]. Financial Performance - In the fiscal year 2022, the total revenue of the company was approximately RMB 27.7 million, a decrease of about 92.2% compared to RMB 352.9 million in fiscal year 2021, primarily due to the cessation of academic education business[21]. - The cost of sales and services for fiscal year 2022 was approximately RMB 18.7 million, a decrease of about 92.1% from RMB 235.4 million in fiscal year 2021, consistent with the revenue decline[22]. - The gross profit for fiscal year 2022 was approximately RMB 9.0 million, down about 92.3% from RMB 117.4 million in fiscal year 2021, with a stable gross margin of approximately 32.5%[23]. - Other income for the fiscal year 2022 was approximately RMB 2.5 million, a decrease of about 69.1% from RMB 8.1 million in 2021, primarily due to a reduction in bank interest income of approximately RMB 5.2 million[24]. - The net other income and losses for fiscal year 2022 was a loss of approximately RMB 2.7 million, a significant decrease of about 96.2% from a loss of approximately RMB 70.3 million in 2021, mainly due to a turnaround from a loss of RMB 48.5 million in property, plant, and equipment to a gain of RMB 0.4 million in 2022[25]. - The net loss for fiscal year 2022 was approximately RMB 31.4 million, a reduction of about 44.7% from a loss of approximately RMB 56.8 million in 2021, mainly due to reduced costs and expenses following the cessation of the academic education business[31]. - Basic and diluted loss per share for fiscal year 2022 was approximately RMB 3.96, compared to RMB 7.31 in 2021[32]. Operational Challenges and Investigations - The company has suspended trading since March 30, 2023, due to concerns raised by the previous auditor regarding various audit matters[10]. - A special investigation committee was established on April 19, 2023, to conduct an independent investigation into the audit issues[10]. - The independent investigation committee has appointed a risk assessment service firm to conduct a procedural investigation into the audit matters[10]. - The company is implementing all recommendations from the independent review to correct internal control deficiencies[11]. - The company faces significant operational risks, including regulatory challenges and competition in the education sector, which may impact its profitability[59]. Management and Governance - Zhang Hongjun appointed as Executive Director and CEO, responsible for overall operations and management since November 30, 2018[42]. - The board of directors consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring a high level of independence[164]. - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Investment Management Committee, each with specific responsibilities[173]. - The independent non-executive directors have confirmed their independence according to the listing rules, ensuring adequate checks and balances within the board[170]. - The company has adopted a corporate governance code and believes it has complied with relevant provisions throughout the fiscal year 2022[164]. Employee and Shareholder Relations - The company emphasizes the importance of maintaining strong relationships with employees, customers, and suppliers to ensure business growth and success[62]. - As of December 31, 2022, the group had 383 employees, a decrease from 492 employees as of December 31, 2021[94]. - Total employee-related costs for the fiscal year 2022 were approximately RMB 23.1 million, down from RMB 135.0 million in the fiscal year 2021[94]. - The company has adopted a dividend policy aiming to distribute up to 30% of the distributable net profit to shareholders, subject to various conditions[186]. - The company emphasizes the importance of active communication with shareholders and investors, ensuring timely and accurate disclosure of significant matters[193]. Compliance and Regulatory Matters - The company has not reported any significant violations of applicable laws and regulations that would materially affect its operations during the fiscal year 2022[61]. - The company confirmed compliance with non-competition agreements established by the controlling shareholder during the fiscal year 2022[87]. - The company has received a waiver from the Stock Exchange regarding strict compliance with certain listing rules related to the structured contracts, allowing for continued operations without independent shareholder approval under specific conditions[151]. Strategic Acquisitions and Investments - The company acquired a 60% stake in Zhengzhou Zhongzhichuang Education Technology Co., Ltd. in May 2022, focusing on adult vocational training and technical education in computer science and information technology[15]. - The group plans to use the unutilized net proceeds by the end of 2025, extending the previous timeline due to a shift in business focus[64]. - The company plans to allocate about 30% of the net proceeds for strategic acquisitions of quality after-school education service companies in other regions of China[63]. Risk Management and Internal Controls - The company is committed to maintaining a robust risk management and internal control system to support long-term sustainable development[189]. - The company has established a risk management framework that includes risk identification, assessment, and mitigation strategies, ensuring effective monitoring and reporting to the board[190]. - The Audit Committee confirmed that there were no findings of fraud or significant internal control deficiencies within the group[178]. - The company has adopted all recommendations from an internal control review conducted by Zhongshen Zhonghuan, which identified several key internal control deficiencies[190].
大山教育(09986) - 2024 - 年度财报