Financial Performance - The Group's turnover for the year ended March 31, 2019, decreased by 15.7% to HK$2,437 million, down from HK$2,892 million in 2018[5] - Gross profit slightly decreased by 0.7% to HK$603 million, with a gross profit margin increase to 24.7% from 21.0% in 2018[5] - Net profit attributable to owners of the Company decreased by 0.7% to HK$138 million, compared to HK$139 million in 2018[5] - The Group's total equity reached HK$2,214 million as of March 31, 2019, down from HK$2,317 million in the previous year[16] - The Group's net current assets amounted to HK$1,886 million, with bank and cash balances of HK$1,085 million as of March 31, 2019, compared to HK$2,009 million and HK$1,082 million respectively in the previous year[16] - The Group's overall inventory level decreased by 17.7% to HK$824 million as of March 31, 2019, from HK$1,001 million a year earlier[13] - The Group's aggregate rental cost decreased by 4.1% to HK$162 million, accounting for 34.0% of overall operating expenses[12] - The Group's bank loans were HK$63 million as of March 31, 2019, down from HK$75 million the previous year[16] Dividends - The Board recommended a final dividend of 8.0 HK cents per share and a special dividend of 13.5 HK cents per share for the year ended March 31, 2019[6] - The Company lacks a predetermined dividend policy, with future dividends to be decided by the Board based on market conditions, operating results, and financial position[120] Market and Economic Conditions - The ongoing China-US trade dispute and fluctuations in the Chinese Yuan have impacted consumer sentiment and spending[5] - Domestic consumption contributed 76.2% of China's GDP growth, despite a slower growth rate of 6.6% year-on-year in 2018[10] - The openings of new infrastructure, such as the Guangzhou-Shenzhen-Hong Kong Express Rail Link, are expected to stimulate Hong Kong's tourism and retail market[10] - The number of visitors to Hong Kong rose by 11.4% to over 65 million, with mainland tourists increasing by 14.8% to 51 million[10] Business Strategy - The Group aims to strengthen its leading position in the luxury watch market and generate greater returns to shareholders[10] - The Group aims to enhance brand presence and sales through the relocation of its flagship store to a premium location[12] - The Group has implemented inventory management policies to ensure stable cash flow and maintain a healthy financial position[13] - The primary objective of the Company is to enhance long-term total return for shareholders, focusing on sustainable recurring earning growth and maintaining a strong financial profile[49] Human Resources and Employee Development - Approximately 600 employees were employed across HK, Macau, China, and Taiwan as of March 31, 2019, with about 70% located in Mainland China[19] - The Group has invested significantly in employee training and development to enhance service quality, aligning with its philosophy of providing "Service Excellence" to customers[26] - The Group's leadership development training for management has focused on skills such as leadership, personal development, and team management, contributing to innovative ideas within the company[24] - The Group's commitment to employee performance evaluation and compensation adjustments reflects its strategy to maintain a motivated workforce[24] - Recruitment and promotion are based on performance and merit, emphasizing diligence, initiative, responsibility, and integrity[197] Corporate Governance - The Company has complied with the corporate governance code provisions, with a noted deviation from Code Provision A.4.1[45] - The Board is accountable to shareholders for long-term performance and oversees the management of the business[51] - The Company emphasizes effective risk management and internal control as part of its corporate governance practices[44] - The Audit Committee comprises all Independent Non-executive Directors and is responsible for overseeing the relationship with external auditors and reviewing financial statements[100] - The Company Secretary ensures that Board procedures are followed and that activities are conducted efficiently[76] Risk Management - The Group has adopted an Enterprise Risk Management (ERM) framework consistent with COSO, facilitating a systematic approach to risk management across its operations[129] - The Board of Directors is responsible for determining the nature and extent of risks to be taken in achieving strategic objectives and monitoring the effectiveness of risk management systems[130] - Risk management reports are submitted to the Audit Committee and Board at least annually, with the Board considering the risk management systems effective[136] - The risk management and internal control systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatement or loss[137] Environmental, Social, and Governance (ESG) Initiatives - The ESG taskforce has been established to monitor and manage ESG-related risks, evaluate the effectiveness of the Group's ESG management systems, and report achievements to the Board regularly[169] - The Group has established long-term ESG goals and missions to ensure sustainable development and green operations[169] - The company prioritizes material ESG issues, including product responsibility and data privacy, as part of its commitment to environmental, social, and governance standards[178] - The company adheres to various laws and regulations, including the Personal Data (Privacy) Ordinance and Trade Description Ordinance, with no material non-compliance identified during the reporting period[186] Customer Experience and Service Quality - The company has been awarded the "Service Industry Leader – Silver Award" by the Hong Kong Retail Management Association, reflecting its commitment to customer service[183] - The company has a specially designed VIP lounge at flagship stores to enhance customer experience and facilitate professional exchanges[182] - The company regularly reviews customer feedback from multiple channels to improve products and services[183] - The management has emphasized the importance of exceeding customer expectations in the luxury goods sector, necessitating ongoing investment in service quality[24]
东方表行集团(00398) - 2019 - 年度财报