Financial Performance - Group sales for the first half of 2021 were HK$1,681 million, representing a 19.0% increase compared to HK$1,413 million in 2020[6]. - Operating profit for the period was HK$94 million, a significant improvement from a loss of HK$182 million in 2020, marking a 151.6% change[5]. - Profit attributable to shareholders was HK$60 million, compared to a net loss of HK$175 million in the previous year, reflecting a 134.3% increase[5]. - Gross profit rose by 24.2% to HK$959 million, with a gross margin improvement of 2.4 percentage points to 57.0%[10][15]. - Profit after income taxes for the period was HK$77 million, compared to a loss of HK$182 million in the same period of 2020[59]. - The Group achieved a gross profit of HK$959 million for the six months ended June 30, 2021, compared to HK$772 million in the same period of 2020, reflecting a gross profit margin improvement[59]. - Operating profit improved significantly to HK$94 million, compared to an operating loss of HK$182 million in the previous year[10]. - The Group recorded an operating profit of HK$94 million for the first half of 2021, compared to an operating loss of HK$182 million in the same period of 2020[18]. - The profit after income taxes for the period was HK$60 million, contributing to a total comprehensive income of HK$51 million[64]. Sales and Market Performance - Online business sales grew by 21.6%, contributing 10.1% to total sales, with non-Mainland China platforms exceeding expectations with a 41.9% increase[12][14]. - Wholesale to franchisees recorded a 21.1% increase, driven by the reopening of stores after the relaxation of movement controls[12]. - Sales in Southeast Asia and Australia increased by 31.4% to HK$531 million, while sales in Mainland China rose by 21.1% to HK$362 million[10]. - Total sales for the six months ended June 30, 2021, were HK$728 million, a decrease of 2.0% compared to HK$743 million in 2020[25]. - Sales in Mainland China reached HK$332 million, a double-digit increase of 11.0% from HK$299 million in 2020, with a net addition of 15 franchised stores[31]. - Total sales for the Group reached HK$1,681 million, with Mainland China contributing HK$362 million, Hong Kong and Macau HK$177 million, Taiwan HK$235 million, Southeast Asia and Australia HK$531 million, Gulf Cooperation Council HK$258 million, and Wholesale to Overseas Franchisees HK$118 million[89]. Cost Management and Expenses - Operating expenses decreased by 2.9% to 54.1% of sales, down from 66.3% in 2020[6]. - Other income and gains decreased by 13.0% to HK$47 million, contributing 2.8% to total sales[10]. - The finance expense was HK$16 million, down from HK$22 million in 2020, mainly due to a reduction in imputed interest on lease liabilities[18]. - Cost of sales increased to HK$726 million in 2021 from HK$629 million in 2020, an increase of approximately 15.5%[100]. - Staff costs rose to HK$293 million in 2021, up from HK$286 million in 2020, reflecting a growth of about 2.4%[100]. Dividends and Shareholder Returns - The Board declared an interim dividend of 6.5 HK cents per share, an increase of 109.7% from 3.1 HK cents per share in 2020[5]. - Proposed dividends for the period were HK$103 million, compared to HK$109 million in the previous year[63]. - The declared interim dividend is 6.5 HK cents per share, an increase from 3.1 HK cents per share in 2020, representing a 109% increase[115]. - The dividend payment is scheduled for September 17, 2021, to shareholders on record as of September 9, 2021[171]. Cash Flow and Liquidity - Cash and bank balances, net of bank loans, were HK$932 million as of June 30, 2021, compared to HK$989 million in the same period of 2020[6]. - Net cash inflow from operating activities was HK$170 million for the first half of 2021, down from HK$231 million in the same period of 2020[68]. - Cash and cash equivalents at the end of the period were HK$1,022 million, a decrease from HK$1,101 million at the end of June 2020[69]. - The current ratio improved to 1.9, based on current assets of HK$1,946 million and current liabilities of HK$1,050 million[46]. - The total cash and bank balances decreased to HK$1,084 million as of June 30, 2021, from HK$1,256 million as of December 31, 2020, a decrease of 13.7%[116]. Inventory and Receivables Management - Inventory turnover on cost decreased by 14 days to 124 days, attributed to increased sales and stable inventory levels[6]. - Trade receivables turnover days decreased by 13 days to 35 days, attributed to better credit control and a strategy to avoid loading franchisees' inventories[50]. - Trade payables turnover days decreased by 18 days to 23 days due to a faster payment schedule to long-term vendors to alleviate financial stress from the Covid-19 pandemic[50]. - The ageing analysis of trade receivables shows that amounts overdue by 0-30 days decreased from HK$162 million to HK$85 million, a reduction of 47.5%[118]. Corporate Governance and Management - The Group's management committee includes the Chairman and Chief Executive, Lau Kwok Kuen, and other executive directors[199]. - The Audit Committee is chaired by Barry John Buttifant, with other members including Kwong Ki Chi and Alison Elizabeth Lloyd[199]. - The Group has maintained a strong corporate governance structure to ensure effective oversight of management[194]. - The Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2021, has been reviewed by PricewaterhouseCoopers[198]. Future Outlook and Strategic Plans - The Group expects enhanced profitability in the coming years due to better sales, improved gross margins, and further rental reductions[18]. - Management anticipates further increases in the proportion of franchised stores, which currently account for over two-thirds of total stores[30]. - The company plans to search for better store locations with realistic rental arrangements, particularly in Hong Kong and Macau[51]. - The Group's strategy includes managing its retail and distribution segments geographically and by brand, focusing on expansion in the Asia Pacific and Gulf Cooperation Council regions[88].

[Ten-Year Financial and Operation Highlights](index=2&type=section&id=Ten-Year%20Financial%20and%20Operation%20Highlights) This chapter presents the Group's key financial and operational data over the past decade, illustrating long-term performance trends, with 2020 showing significant declines in sales, gross profit, operating profit, and profit attributable to shareholders, turning from profit to loss, alongside a decrease in total store count [Ten-Year Financial and Operation Highlights](index=2&type=section&id=Ten-Year%20Financial%20and%20Operation%20Highlights) This chapter presents the Group's key financial and operational data over the past decade, illustrating long-term performance trends, with 2020 showing significant declines in sales, gross profit, operating profit, and profit attributable to shareholders, turning from profit to loss, alongside a decrease in total store count 2020年与2019年关键业绩指标对比 | 指标 | 2020年 (Million HKD) | 2019年 (Million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | **Sales** | 3,122 | 4,852 | -35.7% | | **Gross Profit** | 1,736 | 2,846 | -39.0% | | **Operating Profit (Loss)** | (105) | 397 | Turned from profit to loss | | **Profit (Loss) Attributable to Company Shareholders** | (112) | 230 | Turned from profit to loss | | **Earnings (Loss) Per Share (HK cents)** | (7.10) | 14.60 | Turned from profit to loss | | **Dividend Per Share (HK cents)** | 10.00 | 14.60 | -31.5% | | **Total Global Stores** | 2,185 | 2,375 | -8.0% | [Corporate Information](index=4&type=section&id=Corporate%20Information) This chapter details the company's core organizational structure, including board members, committee compositions, legal advisors, auditors, registered office, and principal bankers, with Mr. Lau Kwok Kuen serving as Chairman and CEO [Corporate Information](index=4&type=section&id=Corporate%20Information) This chapter details the company's core organizational structure, including board members, committee compositions, legal advisors, auditors, registered office, and principal bankers, with Mr. Lau Kwok Kuen serving as Chairman and CEO - Company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with several specialized committees including Audit, Remuneration, Nomination, and Management, supporting corporate governance and decision-making[7](index=7&type=chunk) - The company's independent auditor is PricewaterhouseCoopers[8](index=8&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) Chairman Lau Kwok Kuen reports 2020 as a challenging year with significant sales and profit declines due to COVID-19, noting a net loss in H1 but H2 profitability from cost control and rent concessions, while maintaining a strong cash position and proposing a final dividend, with accelerated digital transformation and increased online sales becoming a strategic focus [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) Chairman Lau Kwok Kuen reports 2020 as a challenging year with significant sales and profit declines due to COVID-19, noting a net loss in H1 but H2 profitability from cost control and rent concessions, while maintaining a strong cash position and proposing a final dividend, with accelerated digital transformation and increased online sales becoming a strategic focus 2020年财务业绩概览 | Indicator | Amount (Million HKD) | Notes | | :--- | :--- | :--- | | **Sales** | 3,122 | Down 35.7% YoY | | **Full-Year Net Loss** | 112 | H1 loss of 175, H2 profit of 63 | | **Year-End Net Cash** | 1,104 | - | | **Proposed Full-Year Total Dividend** | 10.0 HK cents per share | Interim 3.1 HK cents, Final 6.9 HK cents | - The Group's online sales as a percentage of total sales surged from **5.5% in 2019 to 10.5%**, with particularly significant growth in regions outside Mainland China, making third-party online platforms a future strategic focus for the company[9](index=9&type=chunk) - The pandemic accelerated the company's digitalization, with online training, cross-regional meetings, and video communication with suppliers and stores becoming standard practice, contributing to cost and time savings[9](index=9&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's insights and analysis of the company's performance, market conditions, financial health, and future outlook [Overview and Operating Results](index=8&type=section&id=Overview) In 2020, Group sales fell 35.7% to HK$3.122 billion due to the pandemic, with gross margin dropping to 55.6%, resulting in a full-year net loss of HK$112 million despite H2 improvement, primarily impacted by H1 sales decline and HK$70 million non-cash impairment, while online sales grew 22.1% to 10.5% of total sales, and the company maintained a strong financial position with year-end net cash increasing to HK$1.104 billion, proposing a full-year dividend of HK10.0 cents per share 2020年集团经营业绩摘要 | Indicator | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | **Group Sales (Million HKD)** | 3,122 | 4,852 | (35.7%) | | **Gross Margin** | 55.6% | 58.7% | -3.1pp | | **Operating Profit (Loss) (Million HKD)** | (105) | 397 | (126.4%) | | **Profit (Loss) Attributable to Shareholders (Million HKD)** | (112) | 230 | (148.7%) | | **Basic Loss Per Share (HK cents)** | (7.1) | 14.6 | Turned from profit to loss | | **Year-End Net Cash (Million HKD)** | 1,104 | 994 | +11.1% | - Online sales grew by **22.1%**, accounting for **10.5%** of total sales (compared to 5.5% in 2019), with online sales in regions outside Mainland China increasing by **123.5%**[11](index=11&type=chunk)[17](index=17&type=chunk)[19](index=19&type=chunk) - Operating expenses decreased by **21.7%** year-on-year, but a full-year operating loss was recorded due to a significant decline in sales and a special net impairment charge of **HK$70 million**; in the second half, an operating profit of **HK$77 million** was achieved due to sales improvement and government assistance[24](index=24&type=chunk) [Analysis by Market](index=13&type=section&id=ANALYSIS%20BY%20MARKET) This chapter analyzes the Group's operating performance by region, showing a 32.8% sales decline in Greater China, with Hong Kong and Macau severely impacted by a 53.1% sales drop, while Mainland China began recovery in H2 focusing on online sales and franchise networks, other Asia Pacific regions saw a 38.0% sales decrease but most markets remained profitable, the Middle East sales fell 40.9% with recovery dependent on expatriate and international tourist return, and the South Korea joint venture's sales decreased 14.6% but online sales share rose to 35% 各主要市场销售额及门店数量变化 (2020年) | Market | Sales (Million HKD) | YoY Change | Total Stores at Year-End | Store Count Change | | :--- | :--- | :--- | :--- | :--- | | **Mainland China** | 706 | (29.0%) | 784 | (118) | | **Taiwan** | 514 | (12.4%) | 184 | (13) | | **Hong Kong & Macau** | 362 | (53.1%) | 62 | (11) | | **Other Asia Pacific** | 982 | (38.0%) | 599 | +2 | | **Middle East** | 391 | (40.9%) | 173 | (8) | | **South Korea (JV)** | 175,134 (Million KRW) | (14.6%) | 172 | (3) | - The Hong Kong and Macau markets suffered severe economic damage from the dual impact of 2019 social events and the 2020 pandemic, leading the Group to scale down operations by closing high-rent, loss-making stores[30](index=30&type=chunk)[32](index=32&type=chunk) - The South Korea joint venture's online sales surged, accounting for **35%** of its total sales (up from 25% in 2019), demonstrating the effectiveness of its digital transformation[43](index=43&type=chunk) [Financial Position](index=17&type=section&id=FINANCIAL%20POSITION) Despite a significant sales decline, the Group's financial position remains robust, with year-end net cash and bank balances increasing 11.1% to HK$1.104 billion due to cost control, reduced receivables and inventory, and government subsidies, while inventory decreased 20.8% to HK$434 million but inventory turnover days rose to 115, and a leverage ratio of -0.4 indicates low financial risk 2020年末关键财务状况指标 | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash and Bank Balances (Million HKD)** | 1,104 | 994 | | **Current Ratio** | 1.8 | 1.4 | | **Bank Loans (Million HKD)** | 152 | 265 | | **Leverage Ratio** | -0.4 | -0.4 | | **Inventory (Million HKD)** | 434 | 548 | | **Inventory Turnover Days** | 115 | 100 | - Capital expenditure significantly decreased to **HK$30 million** (from HK$76 million in 2019), reflecting the company's cautious store renovation plans during the pandemic[47](index=47&type=chunk)[48](index=48&type=chunk) - The Group increased its equity stake in PT Giordano Indonesia, an indirect non-wholly owned subsidiary in Indonesia, to **65.08%** in July 2020[55](index=55&type=chunk) [Outlook](index=20&type=section&id=OUTLOOK) Management views 2020 as the most challenging year but notes robust financial health due to cash management, anticipating continued challenges but also opportunities in 2021, with strategic focus on operational digitalization, sales channel optimization, global footprint expansion (especially in developing markets like Africa), and leveraging reduced competition, expecting Taiwan to lead recovery, and Mainland China to steadily improve with online platforms and franchisees as key development areas - The company's strategic focus will be on operational and marketing digitalization, diversified and optimized sales channels, increasing global footprint, and leveraging opportunities from reduced competition[56](index=56&type=chunk) - Regarding market recovery, Taiwan is expected to lead a rapid recovery, followed by steady improvement in Mainland China, with online platforms and franchisee markets being key development areas[56](index=56&type=chunk) - The company will continue to expand its international business, particularly in developing markets, having achieved success in Kenya and Mauritius and currently negotiating with other African countries, aiming to increase market presence both within and outside the African continent[57](index=57&type=chunk) [Directors and Senior Management Profiles](index=22&type=section&id=Directors%20and%20Senior%20Management%20Profiles) This chapter provides detailed biographies of the company's board members and senior management, including their age, position, professional background, industry experience, and roles in other listed companies or organizations, highlighting the core management's extensive experience in retail, management, legal, and finance [Directors and Senior Management Profiles](index=22&type=section&id=Directors%20and%20Senior%20Management%20Profiles) This chapter provides detailed biographies of the company's board members and senior management, including their age, position, professional background, industry experience, and roles in other listed companies or organizations, highlighting the core management's extensive experience in retail, management, legal, and finance - Dr Lau Kwok Kuen, **68**, serves as the Group's Chairman and Chief Executive Officer, having joined the Group in 1987 and possessing over **12 years** of management and accounting experience[58](index=58&type=chunk) - The Board of Directors comprises diverse backgrounds, including professionals in retail operations (Dr Chan Ka Wai), law and human resources (Mr Mark Alan Loynd), corporate development (Dr Cheng Chi-kong), the jewelry industry (Mr Chan Sze Chung), and accounting and academia (Dr Peter Lo Tak-shing, Mr Kwong Chi Keung, Professor Wong Yuk, Dr Alison Elizabeth Lloyd)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [Corporate Governance Report](index=27&type=section&id=Corporate%20Governance%20Report) This section details the company's corporate governance practices, including its framework, board structure, committee functions, and risk management systems [Corporate Governance Framework and Board](index=27&type=section&id=Corporate%20Governance%20Framework) The company is committed to high corporate governance standards, adopting HKEX's Corporate Governance Code, with two deviations in the reporting period: the Chairman and CEO roles are combined (Dr. Lau Kwok Kuen), and the Chairman is exempt from retirement by rotation, which the Board believes provides strong leadership, while the nine-member Board, including four independent non-executive directors, ensures effective oversight and checks and balances - The company deviates from Code Provision A.2.1 of the Corporate Governance Code, where the roles of Chairman and Chief Executive Officer are combined and held by Dr Lau Kwok Kuen, an arrangement the Board believes provides strong and consistent leadership and effective execution of long-term strategies[63](index=63&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The company deviates from Code Provision A.4.2, as the Chairman is exempt from retirement by rotation, which the Board believes is beneficial for the Group's continuity in the Chairman's role[71](index=71&type=chunk) - The Board of Directors consists of **3** executive directors, **2** non-executive directors, and **4** independent non-executive directors, with a high proportion of independent non-executive directors contributing to safeguarding shareholders' interests[66](index=66&type=chunk)[67](index=67&type=chunk) [Board Committees](index=36&type=section&id=BOARD%20COMMITTEES) The company has established three core board committees—Audit, Nomination, and Remuneration—to support board operations, with the Audit Committee comprising all independent non-executive directors overseeing financial reporting, risk management, and internal audits, the Nomination Committee reviewing board structure and nominations, and the Remuneration Committee determining director and executive compensation, complemented by a Management Committee and Risk Management Committee - The Audit Committee comprises all four independent non-executive directors, chaired by Dr Peter Lo Tak-shing, and held **four meetings** in 2020 to review annual and interim results, internal audit reports, and assess risk management and internal control systems[86](index=86&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk) - The Nomination Committee consists of Chairman Dr Lau Kwok Kuen and three independent non-executive directors, holding **one meeting** in 2020 to review board diversity policy, structure, and member rotation matters[90](index=90&type=chunk)[91](index=91&type=chunk) - The Remuneration Committee, chaired by Professor Wong Yuk and including two other directors, held **one meeting** in 2020 to review and approve the remuneration packages for the Chairman, executive directors, and senior management[92](index=92&type=chunk) [Risk Management and Internal Control](index=41&type=section&id=RISK%20MANAGEMENT%20AND%20INTERNAL%20CONTROL) The Board is fully responsible for the Group's risk management and internal control systems, delegating review to the Risk Management Committee, and has established a comprehensive framework including organizational structure, financial controls, budgeting, major expenditure approvals, and a whistleblowing mechanism, with the internal audit team collaborating with Deloitte to regularly report to the Audit Committee, ensuring system effectiveness - The Board bears overall responsibility for the risk management and internal control systems, aiming to safeguard assets, maintain accurate accounting records, and ensure compliance[94](index=94&type=chunk) - The company has a "whistleblowing" mechanism allowing employees to anonymously report misconduct by senior management to the Internal Audit Department, with reports then forwarded to the Audit Committee Chairman for handling[94](index=94&type=chunk)[96](index=96&type=chunk) - The Risk Management Committee works closely with the internal audit team, including internal audit consultant Deloitte, reporting to the Board twice annually to confirm that the risk management and internal control systems are adequate and effective in all material aspects[96](index=96&type=chunk)[98](index=98&type=chunk) [Directors' Report](index=49&type=section&id=Directors'%20Report) This section provides the Directors' Report, covering the business review, financial summary, share capital, major suppliers and shareholders, continuing connected transactions, and share repurchases [Business Review and Financial Summary](index=49&type=section&id=Business%20Review%20and%20Financials) The Directors' Report outlines the Group's primary business as retail and distribution of own-brand apparel, with performance detailed in the financial statements, and the Board recommends a final dividend of HK6.9 cents per share, bringing the full-year total to HK10.0 cents per share, with distributable reserves of HK$551 million at year-end 2020 - The Group's principal activities involve the retail and distribution of Giordano, Giordano Junior, Giordano Ladies, BSX, and other proprietary and licensed brands[110](index=110&type=chunk) 2020年度股息详情 | Dividend Type | Amount Per Share (HK cents) | Payment/Proposed Payment Date | | :--- | :--- | :--- | | **Interim Dividend** | 3.1 | September 18, 2020 | | **Proposed Final Dividend** | 6.9 | June 18, 2021 | | **Total for Full Year** | 10.0 | - | [Share Capital, Major Suppliers and Shareholders](index=51&type=section&id=Share%20Capital%20and%20Major%20Shareholders) This chapter discloses the company's share capital structure, key supplier and customer relationships, and director and major shareholder holdings, noting that the largest supplier accounted for 42% of total purchases in the year, and major shareholder Sino Wealth International Limited, ultimately controlled by Chow Tai Fook Holdings, collectively holds approximately 24.39% of the company's shares - In 2020, the Group's largest supplier accounted for **42%** of total purchases, with the top five suppliers collectively accounting for **68%**[113](index=113&type=chunk)[119](index=119&type=chunk)[121](index=121&type=chunk) - Major shareholder Sino Wealth International Limited (ultimately controlled by Chow Tai Fook Holdings) holds **384,830,000 shares** in the company, representing approximately **24.39%** of the issued share capital[137](index=137&type=chunk)[140](index=140&type=chunk) - Executive Directors Lau Kwok Kuen, Chan Ka Wai, and Mark Alan Loynd hold approximately **1.74%**, **0.72%**, and **0.59%** interests in the company respectively (including personal and derivative instrument interests)[128](index=128&type=chunk) [Continuing Connected Transactions](index=57&type=section&id=Continuing%20Connected%20Transactions) During the reporting period, the Group engaged in continuing connected transactions with New World Department Store China Limited, primarily involving property and counter rentals in Mainland China under a renewed comprehensive tenancy agreement signed on December 31, 2019, with the Group paying approximately HK$1.28 million in rent to New World Department Store China Limited in 2020, well below the HK$5 million annual cap - The Group entered into a renewed comprehensive tenancy agreement with New World Department Store China Limited (a connected person), effective until December 31, 2022, for the lease of properties and counters in Mainland China[148](index=148&type=chunk) 与新世界百货集团的租金交易 | Year | Actual Rent Paid/Payable (Million HKD) | Annual Cap (Million HKD) | | :--- | :--- | :--- | | **2020** | 1.28 | 5.0 | [Purchase, Sale or Redemption of Listed Securities](index=60&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) For the year ended December 31, 2020, the company repurchased 870,000 ordinary shares on the Stock Exchange for a total consideration of approximately HK$995,100, which the Board believes reflects confidence in the company's long-term business prospects, with all repurchased shares subsequently cancelled 2020年度股份购回详情 | Month of Repurchase | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | :--- | | June 2020 | 870,000 | 1.15 | 1.13 | 995,100 | [Independent Auditor's Report](index=62&type=section&id=Independent%20Auditor's%20Report) This section contains the independent auditor's opinion on the consolidated financial statements, highlighting key audit matters [Independent Auditor's Report](index=62&type=section&id=Independent%20Auditor's%20Report) PricewaterhouseCoopers, the independent auditor, issued an unmodified opinion on the Group's consolidated financial statements for the year ended December 31, 2020, affirming they present a true and fair view of the Group's financial position and performance, with specific emphasis on three key audit matters: valuation of goodwill impairment and put option liabilities, inventory valuation, and impairment of retail store assets - The auditor issued an unmodified opinion on the financial statements, confirming they present a true and fair view of the Group's financial position in accordance with Hong Kong Financial Reporting Standards[164](index=164&type=chunk) - Key audit matters include: - **Valuation of goodwill impairment and put option liabilities**: Involves significant judgment regarding the future performance of the Middle East business[169](index=169&type=chunk)[170](index=170&type=chunk) - **Inventory valuation**: Estimation of net realizable value for apparel inventory involves complexity and judgment[172](index=172&type=chunk) - **Impairment of retail store assets**: Involves significant judgment regarding future cash flows of retail stores showing impairment indicators[173](index=173&type=chunk) [Consolidated Financial Statements](index=71&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's core consolidated financial statements for the reporting period [Consolidated Financial Statements Summary](index=71&type=section&id=Consolidated%20Financial%20Statements) This chapter presents the Group's core consolidated financial statements for 2020, including the income statement, statement of comprehensive income, balance sheet, cash flow statement, and statement of changes in equity, showing a shift from profit to loss, decreased sales, but continued net cash inflow from operating activities, with total assets and liabilities both declining, and the company maintaining a net current asset position 2020年合并财务报表关键数据 (百万港元) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | **Income Statement:** | | | | Sales | 3,122 | 4,852 | | Gross Profit | 1,736 | 2,846 | | Operating (Loss)/Profit | (105) | 397 | | (Loss)/Profit Attributable to Company Shareholders | (112) | 230 | | **Balance Sheet (Year-End):** | | | | Total Assets | 4,383 | 5,196 | | Total Liabilities | 1,752 | 2,349 | | Equity Attributable to Company Shareholders | 2,470 | 2,640 | | Net Current Assets | 916 | 714 | | **Cash Flow Statement:** | | | | Net Cash Inflow from Operating Activities | 616 | 1,068 | | Net Cash Inflow/(Outflow) from Investing Activities | 262 | (120) | | Net Cash Outflow from Financing Activities | (667) | (1,120) | | Cash and Cash Equivalents at Year-End | 1,194 | 970 | [Notes to the Financial Statements](index=79&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and supplementary information for the consolidated financial statements [Notes to the Financial Statements](index=79&type=section&id=Notes%20to%20the%20Financial%20Statements) This chapter provides detailed explanations and supplementary information for the consolidated financial statements, covering the company's significant accounting policies, critical accounting estimates and judgments, financial risk management, segment information, and breakdowns of various asset, liability, and profit/loss items, which are crucial for understanding the company's financial position and operating results - The notes detail the application of key accounting policies such as revenue recognition, leases (HKFRS 16), financial instruments, and goodwill impairment testing[200](index=200&type=chunk)[259](index=259&type=chunk)[234](index=234&type=chunk)[229](index=229&type=chunk) - The financial risk management section indicates that the Group faces primary financial risks including exchange rate risk, credit risk, and liquidity risk, and outlines corresponding management strategies[264](index=264&type=chunk) - Segment information reveals that retail and distribution is the main operating segment, managed by region and brand, with Other Asia Pacific being the largest sales contributor, but Hong Kong and Macau markets experiencing the most significant operating losses[308](index=308&type=chunk)[311](index=311&type=chunk) [Share Option Information](index=163&type=section&id=Share%20Option%20Information) This section provides details on the company's share option scheme, including grants, exercises, and outstanding options [Share Option Information](index=163&type=section&id=Share%20Option%20Information) This chapter details the company's share option scheme, adopted in 2011 to incentivize and reward eligible participants contributing to the Group, disclosing share option movements in 2020, including new grants, lapses, and outstanding options at year-end, along with exercise prices and periods - The company adopted a new share option scheme ("2011 Share Option Scheme") on June 9, 2011, which is valid until June 8, 2021[490](index=490&type=chunk)[491](index=491&type=chunk)[500](index=500&type=chunk) - On September 9, 2020, the Board granted **77,310,000** share options under the scheme, with an exercise price of **HK$1.39** per share[508](index=508&type=chunk) 截至2020年末董事持有的购股权 | Director Name | Number of Unexercised Share Options at Year-End | | :--- | :--- | | **CHAN Ka Wai** | 10,700,000 | | **Mark Alan LOYND** | 9,064,000 | [Appendix – Environmental, Social and Governance Report](index=174&type=section&id=Appendix%20%E2%80%93%20Environmental,%20Social%20and%20Governance%20Report) This appendix provides the company's Environmental, Social, and Governance (ESG) report, detailing its performance and initiatives in these areas [Environmental Aspect](index=177&type=section&id=Environmental) The company is committed to environmentally responsible operations, reducing its environmental impact by conserving energy (electricity), water, and minimizing waste, with total greenhouse gas emissions and water consumption decreasing in the reporting period, though intensity increased due to a larger sales decline, and has implemented various energy-saving measures like energy-efficient lighting and optimized air conditioning, while using recyclable materials in products 2020年环境绩效概览 | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | **Total GHG Emissions (tCO2e)** | 9,964 | 11,369 | -12.4% | | **Total Water Consumption (cubic meters)** | 79,651 | 81,312 | -2.0% | | **Total Non-Hazardous Waste (metric tons)** | 798 | 1,319 | -39.5% | - The company incorporates eco-friendly elements into its products, such as the G-Warmer series using biodegradable and recycled polypropylene, and the G-Motion brand utilizing fluorine-free eco-friendly water repellents[542](index=542&type=chunk) [Social Aspect](index=184&type=section&id=Social) On the social front, the company focuses on employees, supply chain, product responsibility, anti-corruption, and community engagement, implementing diverse and equal employment policies, adopting work-from-home and enhanced sanitation measures during the pandemic, establishing strict supplier screening and quality control mechanisms, requiring suppliers to adhere to ethical sourcing, and consistently supporting 'Project Hope' by donating to 22 Hope Primary Schools - As of the end of 2020, the total number of employees in the reporting markets was **3,122**, a year-on-year decrease of **26.92%**, with female employees accounting for **80.4%**[544](index=544&type=chunk)[548](index=548&type=chunk) - In 2020, the company provided over **19,822 hours** of internal training for employees and offers a study allowance program to encourage continuous learning[591](index=591&type=chunk)[595](index=595&type=chunk) - The company prohibits child and forced labor and requires suppliers to comply with "Core Ethical Sourcing Guidelines"[625](index=625&type=chunk)[631](index=631&type=chunk] As of the end of 2020, the company had **126** suppliers, with **81.6%** located in Mainland China[638](index=638&type=chunk) - The company has long supported "Project Hope," having donated to **22** Giordano Hope Primary Schools by the end of 2020, providing educational opportunities for children in impoverished rural areas[669](index=669&type=chunk)[672](index=672&type=chunk)

Financial Performance - Group sales declined by 44.4% to HK$1,413 million for the six months ended June 30, 2020, compared to HK$2,542 million in 2019[4]. - The Group recorded a net loss of HK$175 million, a significant decrease from a net profit of HK$161 million in the same period of 2019[5]. - EBITDA decreased by 70% to HK$188 million, down from HK$618 million in the previous year[4]. - The gross margin for the Group was 54.6%, down from 59.3% in 2019[5]. - Operating loss was HK$182 million, a significant decline compared to an operating profit of HK$259 million in 2019[10]. - Loss attributable to shareholders was HK$175 million, compared to a profit of HK$161 million in the prior year, marking a 208.7% change[10]. - Total comprehensive loss for the period was HK$228 million, compared to a comprehensive income of HK$183 million in the previous year[58]. - The Company reported a loss after income taxes for the period of HK$175 million, contributing to a total comprehensive income of HK$(212) million[61]. Sales and Revenue - Online sales increased to HK$139 million, representing 9.8% of total sales, compared to 5.2% in 2019[5]. - Physical store sales dropped to HK$1,075 million, accounting for 76.1% of total sales, down from 82.7% in 2019[12]. - Total sales in Greater China for the six months ended June 30, 2020 were HK$754 million, down 39.7% from HK$1,251 million in 2019[26][32]. - Total sales in the rest of Asia Pacific were HK$419 million, down 48.1% from HK$807 million in 2019[34][35]. - Sales in Mainland China were HK$299 million, down from HK$529 million in 2019, reflecting a decline of approximately 43.4%[89]. - Sales in HKSAR and Macau totaled HK$309 million, a decrease from HK$561 million in 2019, representing a decline of about 44.8%[89]. - The Group's sales have gradually started to recover following the improvement of the situation in the areas where it operates, post-June 30, 2020[157]. Inventory and Cash Management - Inventory turnover days increased to 138 days, up from 92 days in the previous year[5]. - Cash and bank balances, net of bank loans, were HK$989 million as of June 30, 2020, compared to HK$994 million on December 31, 2019[5]. - Net cash inflow from operating activities was HK$231 million, a decline of 56.7% compared to HK$533 million in the previous year[64]. - Cash and cash equivalents at the end of the period were HK$1,101 million, down from HK$1,265 million at the end of June 2019[65]. - Trade receivables turnover days were 48 days, an increase of 6 days compared to the same period last year[50]. - Inventory at period end was HK$486 million, down 7.6% from HK$526 million in the previous year[10]. Operational Changes and Strategies - The Group plans to focus on rental reduction and technology-based improvements to enhance operational efficiency[18]. - The Group plans to close underperforming stores and allocate more resources to online and franchise businesses[51]. - The Group is expediting digitization of its business operations to prepare for a rebound[51]. - The Group's initiative to develop local online businesses has proven successful, with plans for continued deep localization[51]. - The Group is investing heavily in training for sales, customer service, management, and leadership development[51]. Market Conditions and Challenges - The COVID-19 outbreak and prolonged Sino-US disputes severely impacted consumer sentiment across the Greater China region[27][28]. - The Group anticipates a challenging operating environment in the second half of the year due to the COVID-19 pandemic and Sino-US relationship uncertainties[51]. - The Group is still assessing the impact of the COVID-19 outbreak on its performance for the second half of 2020 and is currently unable to estimate the quantitative impacts[157]. Dividends and Shareholder Returns - The Board declared an interim dividend of 3.1 HK cents per share, down from 10.2 HK cents per share in 2019[5]. - The company aims to return surplus cash to shareholders through dividends and share repurchases, aligning with its dividend policy[158]. - The board has considered the economic outlook and the group's financial position before declaring the interim dividend[158]. Employee and Management Information - The Group had approximately 6,600 employees as of June 30, 2020, down from 7,900 employees on December 31, 2019[51]. - The Group's management has taken voluntary pay cuts to show solidarity with stakeholders[51]. - The company has complied with all applicable code provisions under the Corporate Governance Code, except for specific deviations regarding the roles of the chairman and chief executive[182]. Future Outlook - The company anticipates a stable economic environment, which will support its growth strategy and operational goals for the upcoming year[193]. - Giordano plans to open 20 new retail locations across Asia by the end of the fiscal year, aiming to increase market penetration by 5%[193]. - The company is investing in new product lines, with a budget allocation of HKD 50 million for research and development in innovative apparel technologies[193].

Financial Performance - Sales for 2019 were HK$4,852 million, a decrease of 11.9% from HK$5,509 million in 2018[4] - Gross profit for 2019 was HK$2,846 million, resulting in a gross margin of 58.7%, slightly down from 59.0% in 2018[4] - Operating profit decreased to HK$397 million in 2019, with an operating margin of 8.2%, compared to 11.3% in the previous year[4] - EBITDA for 2019 was HK$1,183 million, with an EBITDA margin of 24.4%, down from 14.9% in 2018[4] - Profit attributable to shareholders was HK$230 million, representing a decrease of 52.1% from HK$480 million in 2018[4] - Total comprehensive income for the year was HK$282 million, a decrease of 39.5% from HK$467 million in 2018[188] - Profit after income taxes for the year was HK$289 million, representing a 46.6% decrease from HK$542 million in 2018[188] - Earnings per share attributable to shareholders decreased to HK$14.6 cents, down from HK$30.5 cents in 2018[186] Store Operations - The total number of stores worldwide at year-end was 2,375, a slight decrease from 2,426 in 2018[4] - The number of stores at year-end decreased by 41 to 1,172 in Greater China[42] - The number of franchised stores in Mainland China increased slightly to 641 from 639 in 2018[17] - The number of directly-operated stores (DOS) in Taiwan decreased to 197 from 200 in 2018[17] - The total number of stores in the Middle East at year-end was 181, a slight decrease from 182[49] Market Conditions - The global economic growth slowdown that began in 2018 rapidly deteriorated in 2019, significantly impacting the retail and hospitality industries, leading to weak performance for the Company[9] - Group sales decreased by 11.9%, or by 11.1% at constant exchange rates, significantly impacted by macro factors such as the Sino-US trade dispute and regional social events[22] - E-commerce revenue generated HK$267 million, representing a decrease of 15.0%, primarily due to unsatisfactory performance in Mainland China[22] Financial Position - The company reported a current ratio of 1.4 times, down from 2.5 times in 2018[4] - The market capitalization at year-end was HK$3,709 million, compared to HK$5,840 million in 2018[4] - Total assets as of the end of 2019 were HK$5,196 million, while total liabilities were HK$2,349 million[6] - Cash and bank balances, net of bank loan, were HK$994 million on December 31, 2019[15] - The retained profits at the end of 2019 were HK$1,069 million, down from HK$1,267 million in 2018, indicating a decrease of about 15.6%[198] Corporate Governance - The Company has adopted the Corporate Governance Code as stated in Appendix 14 to the Listing Rules on the Stock Exchange[70] - The Board is responsible for setting the Group's overall objectives and strategies, monitoring financial performance, and reviewing corporate governance standards[70] - The Company has established three Board Committees: the Audit Committee, the Nomination Committee, and the Remuneration Committee, along with a Management Committee and a Risk Management Committee[76] - The Board is committed to excellence in corporate governance and has implemented policies and practices to ensure compliance with legal and regulatory requirements[72] Dividend Policy - The dividend payout ratio for 2019 was 100.0%, consistent with the previous year[4] - The final dividend recommended is 4.4 HK cents per share, down from 16.5 HK cents per share in 2018, totaling 14.6 HK cents per share for 2019[62] - Proposed dividends for the year were HK$69 million, a decrease from HK$260 million in 2018[189] Employee Management - As of December 31, 2019, the Group had approximately 7,900 employees, a decrease from 8,200 employees on December 31, 2018[64] - Employee sacrifices, including voluntary pay reductions, were acknowledged as crucial for navigating difficulties[14] - The Group offers competitive remuneration packages and generous, goal-oriented bonuses targeted to different levels of staff[64] Strategic Focus - The company plans to focus on market expansion and new product development in the upcoming year[4] - Management plans to expand wholesale and franchise businesses in developing markets, with store openings expected in India and Kenya in 2020[24] - The Company continues to focus on operational factors within its control while adapting to market changes[12] Audit and Compliance - The independent auditor, PricewaterhouseCoopers, has issued an unqualified opinion on the Group's financial statements for the year[169] - The Audit Committee is responsible for the appointment, re-appointment, and removal of external auditors, as well as reviewing the Group's financial information and overseeing risk management and internal control systems[97] - The Company has arranged appropriate directors' and officers' liability insurance in line with the Corporate Governance Code[91] Risk Management - The Group's risk management and internal control systems are evaluated for adequacy and effectiveness on an ongoing basis[104] - The Risk Management Committee is fully accountable to the Board for providing assurance on managing and monitoring the systems of risk management and internal controls[104] Shareholder Communication - The Company utilizes internet and electronic communication to provide timely and transparent information to shareholders[112] - The Board has established a shareholders' communication policy to enhance relationships with shareholders and ensure compliance with relevant rules[112]

Financial Performance - Group sales for the six months ended June 30, 2019, were HK$2,542 million, a decrease of 11% compared to HK$2,860 million in 2018[4] - Operating profit for the same period was HK$259 million, down 26% from HK$348 million in 2018[4] - Profit attributable to shareholders decreased by 36.6% to HK$161 million, compared to HK$254 million in 2018[4] - The gross margin for the group was 59.3%, with comparable store gross profit down by 8.9% and comparable store sales down by 8.6%[5] - Group sales decreased by 11.1% to HK$2,542 million, with a 9.1% decline at constant exchange rates[12] - Sales in the Greater China region dropped by 17.3%, significantly impacting overall performance[12] - E-business revenue was HK$132 million, down 19.0%, accounting for 5.2% of total sales[13] - Physical store sales recorded an 8.9% decline, while wholesale sales to franchisees fell by 20.8%[14] - Gross profit decreased by 11.0% to HK$1,508 million (2018: HK$1,694 million), primarily due to a volume decrease of 9.3%, despite an increase in average selling price and a decrease in average product cost[17] - Profit after income taxes attributable to shareholders decreased by 36.6% to HK$161 million (2018: HK$254 million), with a net margin of 6.3%[28] - Total sales for the six months ended June 30, 2019, were HK$1,297 million, down 14.3% from HK$1,513 million in 2018[37] - Operating profit for the same period was HK$54 million, a significant decrease of 61.2% compared to HK$139 million in 2018[35] - Total sales for the six months ended June 30, 2019, were HK$343 million, representing a 2.1% increase from HK$336 million in 2018[41] - Gross profit increased by 8.3% to HK$222 million, with a gross margin of 64.7%[41] - Operating profit rose by 36.0% to HK$68 million, with an operating margin of 19.8%[41] - The Group's total inter-segment sales were HK$599 million, down from HK$641 million in 2018, reflecting a decrease of approximately 6.6%[116] - The profit attributable to shareholders for the six months ended June 30, 2019, was HK$161 million, a decrease of 36.5% compared to HK$254 million in 2018[124] Store Operations - The total number of stores decreased by 20 to 2,424 as of June 30, 2019[6] - The number of franchised stores in Mainland China increased to 636 from 612 in 2018, while directly operated stores decreased to 281 from 326[7] - The total number of stores at the end of the period was 1,196, a decrease of 24 stores from 1,220 in 2018[37] - Total stores across all markets decreased from 434 to 427, with Southeast Asia showing a slight increase in store count from 225 to 228[47] - The number of stores in South Korea decreased from 191 to 179, reflecting a reduction of 12 stores[45] Cash and Liquidity - Cash and bank balances, net of bank loans, were HK$1,026 million as of June 30, 2019[5] - The net cash and bank balances at period end were HK$1,026 million, a decrease of 16.2%[12] - Cash generated from operations increased to HK$616 million in 2019, up from HK$486 million in 2018, reflecting a growth of 26.8%[68] - Cash and cash equivalents at the end of the period were HK$1,265 million, slightly down from HK$1,249 million in 2018[70] - Cash and cash equivalents increased to HK$1,265 million as of June 30, 2019, compared to HK$1,142 million as of December 31, 2018, representing an increase of 10.8%[144] - Current ratio decreased to 1.5 based on current assets of HK$2,264 million and current liabilities of HK$1,486 million (2018: 2.4)[48] Inventory Management - Inventory turnover days increased to 92 days from 77 days in 2018[4] - Inventory at period end was HK$526 million, with an inventory turnover of 92 days[12] - Group inventories increased by HK$27 million, or 5.4%, to HK$526 million (June 30, 2018: HK$499 million), primarily consisting of winter stock[49] - Management will closely monitor inventory levels to avoid an inventory glut, which could negatively impact future gross profit[49] Dividends and Shareholder Returns - The interim dividend per share was HK 10.2 cents, a decrease of 40% from HK 17.0 cents in 2018[4] - Proposed dividends for the period were HK$161 million, down from HK$260 million in the previous year, a decrease of 38.0%[64] - The company aims to return surplus cash to shareholders through dividends and share repurchase, aligning with its dividend policy[169] - The interim dividend is payable on September 20, 2019, to shareholders listed on the register as of September 12, 2019[169] Market Performance - Sales in the Greater China region dropped by 17.3%, significantly impacting overall performance[12] - Sales in Mainland China accounted for 20.8% of total sales but only contributed 1.1% to operating profit, highlighting challenges in profitability[23] - The Greater China region experienced a comparable store sales (CSS) decrease of 12.6% due to the Sino-US trade dispute, impacting domestic retail[34] - Sales to external customers in Hong Kong and Macau were HK$561 million, down from HK$651 million in 2018, a decrease of approximately 13.9%[116] Financial Position - Total assets as of June 30, 2019, increased to HK$5,100 million, compared to HK$4,124 million at the end of 2018[64] - Current liabilities increased to HK$1,486 million, up from HK$992 million at the end of 2018, indicating a rise of 49.8%[64] - Non-current liabilities rose to HK$706 million, compared to HK$123 million at the end of 2018, reflecting a significant increase[64] - As of June 30, 2019, total equity attributable to shareholders of the Company was HK$2,908 million, a decrease from HK$3,000 million at December 31, 2018[65] Accounting and Compliance - The Group adopted HKFRS 16 Leases effective January 1, 2019, resulting in changes to accounting policies and adjustments to unaudited interim results[81] - The Group's principal accounting policies were updated to reflect the changes in lease accounting, affecting both the balance sheet and income statement[89] - The unaudited condensed consolidated interim financial information for the six months ended June 30, 2019, was reviewed by PricewaterhouseCoopers[191] - The Audit Committee has discussed auditing, risk management, and internal control systems regarding the interim results for the six months ended June 30, 2019[192] Corporate Governance - The company has complied with all applicable code provisions under the Corporate Governance Code, with some deviations noted[186] - The company believes that stability and continuity in the role of the Chairman are beneficial for successful business plan implementation[186] - The company has a strong corporate governance structure in place to ensure effective oversight of management[186] Employee and Management Information - The Group had approximately 7,900 employees as of June 30, 2019, down from 8,200 employees on December 31, 2018[55] - The company reported an annual director's fee of HK$420,000 for Dr. Barry John Buttifant, effective from April 1, 2019[187] - Dr. Chan Ka Wai's annual salary is set at HK$2,343,162, effective from April 1, 2019[187] Share Options and Equity - A total of 2,724,000 share options were outstanding as of June 30, 2019, under the 2002 and 2011 Share Option Schemes[181] - The total number of share options granted during the period is 148,940,000[184] - The total number of share options exercised during the period is 1,996,000[184] - The total number of share options lapsed during the period is 210,000[184] - The total number of share options cancelled during the period is 146,734,000[184] Sustainability and Corporate Responsibility - The company emphasizes its commitment to sustainability by printing its interim report on environmentally friendly paper[195]

Financial Performance - Sales for 2018 reached HK$5,509 million, a slight increase from HK$5,412 million in 2017, representing a growth of 1.8%[4] - Gross profit for 2018 was HK$3,250 million, maintaining a gross margin of 59.0%, compared to 59.5% in 2017[4] - Operating profit decreased to HK$625 million, with an operating margin of 11.3%, down from 12.7% in the previous year[4] - EBITDA for 2018 was HK$821 million, resulting in an EBITDA margin of 14.9%, a decline from 16.1% in 2017[4] - Profit attributable to shareholders was HK$480 million, with earnings per share (EPS) of HK$30.5 cents, compared to HK$31.8 cents in 2017[4] - Profit after income taxes attributable to shareholders was HK$480 million, a decrease from HK$500 million in 2017[10] - Total comprehensive income for the year was HK$467 million, significantly lower than HK$680 million in 2017[188] - Profit before income taxes for 2018 was HK$684 million, down from HK$744 million in 2017, a decrease of about 8.1%[193] Liquidity and Financial Health - The company reported a current ratio of 2.5 times, indicating strong liquidity[4] - Total assets amounted to HK$4,124 million, while total liabilities were HK$1,115 million, indicating a healthy balance sheet[4] - Cash and bank balances, net of bank loan, were HK$1,017 million at December 31, 2018[19] - Current assets decreased to HK$2,457 million in 2018 from HK$2,574 million in 2017, a reduction of about 4.5%[189] - Total liabilities decreased to HK$1,115 million in 2018 from HK$1,181 million in 2017, a decrease of about 5.6%[191] - Net current assets decreased to HK$1,465 million in 2018 from HK$1,526 million in 2017, a decline of approximately 4.0%[191] Store Operations and Expansion - The total number of stores worldwide at year-end was 1,578, with 1,103 directly operated stores and 475 operated by franchisees[4] - The total number of stores increased by 12 during the year, reaching 2,426 stores[18] - The Group is actively developing new franchise markets in Africa and India, with results expected to materialize in 2020 and beyond[11] - The company plans to expand its market presence and enhance product offerings in the upcoming fiscal year[6] Market Challenges and Outlook - The retail industry faced significant challenges in 2018 due to the Sino-US trade dispute and unseasonably warm weather[11] - The outlook for 2019 remains unpredictable due to global market volatility[12] - The Group anticipates a challenging retail environment in 2019 due to ongoing Sino-US trade disputes and rising interest rates[71] - Consumer sentiment is expected to remain cautious in 2019, prompting the Group to closely monitor economic developments[71] Corporate Governance - The Company fully complied with the Corporate Governance Code except for deviations from Code Provisions A.2.1 and A.4.2 during the year 2018[78] - The Board comprises four Independent Non-executive Directors, two Non-executive Directors, and three Executive Directors, ensuring a diverse range of expertise and effective guidance[81] - The Company has established compliance procedures to ensure adherence to relevant laws and regulations[116] - The Board is committed to transparency, accountability, and independence to uphold the interests of stakeholders and maximize shareholder value[78] Risk Management - The Group's risk management committee is chaired by Mr. Loynd, emphasizing the importance of compliance and governance[74] - The Risk Management Committee, comprising four members, is responsible for the Group's risk management and internal control systems, reporting to the Board twice a year[103] - The Group maintains proper and accurate accounting records to enhance the reliability of financial reporting and ensure compliance with applicable laws[102] Employee and Talent Development - The Group continues to recruit young talent as part of its ongoing succession plan[12] - The Group will continue to invest heavily in training for sales, customer service, management, planning, and leadership development[72] - The Fast-Track Management Scheme, restructured in 2014, has graduates now in important executive positions across multiple disciplines[72] Shareholder Returns - The dividend payout ratio for 2018 was 109.8%, reflecting a commitment to returning value to shareholders[4] - The Board declared a total dividend of HK33.5 cents per share for 2018[10] - Proposed dividends for 2018 were HK$260 million, down from HK$314 million in 2017, a reduction of about 17.2%[189] Strategic Initiatives - The company aims to expand its market presence through strategic initiatives and partnerships[74] - The Group plans to improve quality and efficiency while exploring new business opportunities to facilitate growth[71] - E-business and franchising are identified as key strategic channels for future growth in Mainland China[40]