Economic Environment - The global economic landscape presents various interconnected challenges, including geopolitical conflicts and tightening monetary policies, impacting China's economic growth trajectory [8]. - The Hong Kong economy showed a real GDP growth of 2.7% in Q1 2024, down from 4.3% in Q4 2023, indicating a slowdown in economic recovery [142]. - The private consumption expenditure growth was only 1% in Q1 2024, a decrease of 2.5% compared to Q4 2023 [142]. - The International Monetary Fund (IMF) forecasts global economic growth of 3.2% in 2024, supported by resilience in the US and several emerging markets [153]. Business Performance - Hong Kong's restaurant business remains the primary revenue source for the company, but performance has declined due to labor shortages, rising operational costs, and increased competition [9]. - The audited revenue for the reporting period was approximately HKD 99.4 million, a decrease of about 38.8% compared to HKD 162.5 million in the previous fiscal year [141]. - The loss attributable to the company's owners was approximately HKD 16.2 million, an increase of about 30.8% from HKD 12.4 million in the previous fiscal year [141]. - The group recorded total revenue of approximately HKD 99.4 million, a decrease of about 38.8% compared to HKD 162.5 million in the previous year, primarily due to a reduction in customer numbers and intense market competition [159]. Strategic Initiatives - The company continues to leverage its flagship brand Italian Tomato by launching seasonal and festive products to consolidate existing customer bases and attract new customers [9]. - The group has decided to suspend the development of its oral care business in the first half of the fiscal year due to intense local market competition and unclear prospects, focusing resources on more promising areas [12]. - The group is shifting its business focus towards emerging photovoltaic and hydrogen energy markets, planning to install ten photovoltaic precision mesh production lines by the end of 2024 [12]. - The company aims to diversify its operations and expand revenue sources while maintaining core competitiveness [13]. Corporate Governance - The company emphasizes high standards of corporate governance and compliance with GEM listing rules throughout the reporting period [16]. - The company has appointed new independent non-executive directors, with terms set until December 10, 2024, ensuring compliance with corporate governance standards [26]. - The company established a corporate governance committee and appointed new members following resignations in June, July, and December 2023 [37]. - The corporate governance committee is responsible for reviewing and monitoring the company's compliance with governance codes and regulations [38]. Risk Management and Compliance - The company emphasizes a corporate culture of risk management, compliance, and corporate social responsibility to achieve its strategic vision [30]. - The board is committed to maintaining effective risk management and internal control systems to protect shareholder interests [61]. - The company has established appropriate insurance arrangements for legal actions against directors [68]. - The independent auditor did not express any reservations but highlighted significant uncertainties regarding the group's ability to continue as a going concern [59]. Employee and Workforce Management - Employee turnover rates have been increasing, leading to a higher proportion of part-time employees within the company [104]. - The company emphasizes the importance of employee development and provides training opportunities to enhance skills and career growth [114]. - The company promotes a diverse and inclusive work environment, ensuring equal opportunities for all employees [105]. - The company has maintained a focus on health and safety, implementing regular inspections and training to ensure a safe working environment for employees [110]. Environmental, Social, and Governance (ESG) Practices - The company has established a dedicated team to manage ESG matters and ensure effective risk management and internal controls related to ESG [81]. - The company adheres to the ESG reporting principles of materiality, quantification, and consistency to ensure meaningful comparisons of ESG data [80]. - The company has implemented a series of energy-saving measures, including the installation of sensor faucets in offices and restaurants to conserve water [96]. - The company has identified "climate change" as a significant ESG risk affecting its operations, particularly in the restaurant industry [101]. Financial Management - The gross profit margin for the reporting period was approximately 48.5%, down from 53.5% in the previous year, attributed to increased sales costs following the outsourcing of cake production processes [161]. - Operating expenses decreased by approximately 38.2% to about HKD 65.3 million from HKD 105.6 million in the previous year, due to strict cost control measures and optimization of the cost structure [161]. - The group had no significant contingent liabilities as of March 31, 2024, consistent with the previous year [180]. - The company raised approximately HKD 100 million through a rights issue, issuing 1,388,725,000 shares at a subscription price of HKD 0.072 per share [183].
荣晖控股(08213) - 2024 - 年度财报