Market Impact and Sales Performance - The retail sales of wearing apparel in Hong Kong plunged approximately 41.3% to about HK$26.51 billion in 2020 due to the pandemic[8]. - The fashion apparel retailing sector was severely impacted by the COVID-19 pandemic, with a 93.6% drop in visitor arrivals in Hong Kong[8]. - The retail of apparel, shoes, headwear, and knitted products in Mainland China experienced a lesser impact, with a 6.6% decrease in value in 2020[8]. - Revenue from retail stores in Hong Kong and Macau decreased by approximately 43% and 57% respectively, contributing to an overall turnover decrease of 34% to HK$127,283,000[17]. - The Group's revenue from operations in Hong Kong decreased by approximately 43% to HK$55,305,000 for the year[34]. - The Group's turnover decreased by approximately 34% to approximately HK$127,283,000 compared to HK$191,604,000 in 2020[63]. - Revenue from operations outside Hong Kong decreased by approximately 23% to approximately HK$71,978,000, with the contribution rate increasing by 8 percentage points to 57% due to growth in Mainland China[63]. - Sales in Macau plummeted by 57% to approximately HK$14,720,000, leading to the closure of two stores[55]. - The retail sales of apparel in Hong Kong rebounded by approximately 26.1% year-on-year in the first quarter of 2021 as pandemic conditions improved[36]. Financial Performance - The Group recorded a loss of HK$23,205,000 for the Year, narrowing by 84% compared to the previous financial year[12]. - Operating loss decreased by 76% due to the closure of underperforming stores and successful rent negotiations[14]. - Gross profit margin for the Year was 68.3%, down from 76.7% in the previous financial year[18]. - The loss attributable to equity shareholders for the year ended 31 March 2021 was approximately HK$22,751,000, a significant reduction from HK$146,694,000 in 2020, mainly due to improved operating margins and decreased impairment of assets[68]. - Operating expenses totaled approximately HK$160,375,000, a decrease of approximately 41% from HK$270,542,000 in 2020[63]. - The Group suffered an operating loss of HK$29,078,000, compared to an operating loss of HK$119,134,000 in 2020[63]. - The Group's gross profit margin was approximately 68.3%, down from 76.7% in the previous year, mainly due to increased discount sales and promotional activities[63]. Strategic Initiatives and Market Adaptation - The company has accelerated the development of online marketing and sales to adapt to market changes driven by the pandemic[10]. - The pandemic has prompted an increase in online activities, further promoting the development of online business for fashion companies[10]. - The Group launched its own online platform for marketing and sales in Hong Kong at the end of July 2020, marking a shift towards electronic commerce[24]. - The Group is focused on responding to fundamental changes in the fashion apparel market, including the rise of e-commerce[10]. - The Group aims to provide more unique and fashionable clothing to maintain competitiveness in the evolving market[10]. - The Group plans to enhance its cost-effective online sales and marketing platforms, including the development of a mobile application for targeted marketing[1]. - The Group is focusing on repositioning its brand to appeal to younger consumers and enhancing its online presence[19]. - The proportion of mid-range, on-trend, and unique fashion apparel in the spring/summer collection increased from 30% to 50%[23]. - The marketing theme for the seasonal collection emphasizes personal expression and self-awareness, encapsulated in the slogan "C'est MOI, MOISELLE" (我就是慕詩)[23]. Governance and Management Structure - The company reported a commitment to meeting statutory and regulatory requirements, emphasizing transparency, independence, accountability, responsibility, and fairness in corporate governance[107]. - The board of directors consists of six members, with three executive directors and three independent non-executive directors, ensuring a balanced governance structure[111]. - The company has complied with the Corporate Governance Code throughout the year, except for a deviation regarding the separation of the roles of chairman and CEO[109]. - The company’s management team is responsible for operational decision-making, while the board focuses on leadership and strategic oversight[110]. - The company will continue to review its management structure to ensure optimal efficiency and leadership[109]. - The independent non-executive directors were appointed for a term of two years and are subject to retirement by rotation[137]. - The company has adopted a board diversity policy focusing on the size of the Board and the number of non-executive and executive directors[139]. - The company has established a nomination committee in compliance with the Corporate Governance Code[139]. - The attendance record for board meetings was high, with most directors attending all meetings held during the year[112]. Risk Management and Compliance - The Board conducted an annual review of the effectiveness of risk management and internal control systems, focusing on three major business cycles, and was satisfied with their adequacy[161]. - The company maintains an internal audit function and engages external consultants to identify, evaluate, and manage significant risks[163]. - The group faces various risks and uncertainties, which are monitored by management to ensure sustainable operations[186]. Employee and Supplier Relations - The Group employed 374 staff as of 31 March 2021, an increase from 348 in 2020, indicating growth in workforce[73]. - The Group has established a customer loyalty program to enhance customer satisfaction and encourage repeat purchases, offering special discounts to VIP customers[80]. - The Group maintains relationships with over 30 suppliers, with an average business relationship of more than ten years, reflecting strong supplier trust[79]. Financial Position and Capital Management - As of 31 March 2021, the Group's total bank deposits and cash balances amounted to approximately HK$18 million, down from HK$32 million in 2020[69]. - The Group's secured bank borrowings increased to HK$54 million as of 31 March 2021, compared to HK$34 million in 2020[70]. - The net current liabilities stood at HK$57 million at year-end, up from HK$25 million in 2020, indicating current assets were less than current liabilities[71]. - The gearing ratio as of 31 March 2021 was approximately 10.1%, an increase from 6.4% in 2020[71]. - The company has a structured process for shareholders to submit proposals for consideration at general meetings, ensuring compliance with notice periods[172]. Corporate Social Responsibility - Charitable donations made by the group during the year amounted to HK$30,000, an increase from HK$20,000 in 2020[193]. - The group operates a Mandatory Provident Fund Scheme in Hong Kong, requiring both employer and employees to contribute 5% of relevant income, capped at HK$30,000 per month[193]. - The subsidiary in Taiwan contributes 6% of the total salaries of participating employees to a defined contribution scheme governed by the Labour Pension Act[197]. - The subsidiary in Singapore participates in the Central Provident Fund scheme, with contributions charged to profit or loss as they become payable[198].
慕诗国际(00130) - 2021 - 年度财报