Financial Performance - The Group's turnover for the year ended 31 March 2020 decreased by 3.5% to HK$2,353 million compared to HK$2,437 million in 2019[3] - Gross profit increased by 7.0% to HK$645 million, with a gross profit margin improvement to around 27.4% from 24.7% in 2019[3] - Net profit attributable to owners decreased by 27.5% to HK$100 million, down from HK$138 million in 2019, primarily due to impairment losses and increased provisions[3] - The Group's revenue for the year decreased by 17.3% to HK$1,198 million, down from HK$1,449 million in 2019[7] - Revenue in Mainland China increased by 17.5% to HK$945 million, up from HK$804 million in 2019, despite initial impacts from the Covid-19 outbreak[5] Operational Highlights - The Group operated 62 retail and wholesale points in the Greater China region as of 31 March 2020[5] - The Group's sales in Mainland China rebounded since March 2020 as the Covid-19 pandemic became more controlled[5] - The increase in profit contribution from Mainland China operations was mainly due to the reversal of inventory provisions and higher profit margins on in-demand watch products[5] - The Group's overall inventory level decreased by 3.0% to HK$799 million as of March 31, 2020, down from HK$824 million in 2019[10] - Rental expenses decreased by 15.7% to HK$145 million, accounting for 28.7% of the Group's overall operating expenses, down from 36.0% in 2019[9] Corporate Governance - The Company has adopted good corporate governance principles emphasizing a quality Board, effective risk management, and transparency to stakeholders[29] - The Company complied with the Corporate Governance Code throughout the year ended March 31, 2020, with specific deviations explained in the report[30] - The Board's composition is well balanced, with each Director having relevant knowledge and experience related to the Group's business[40] - The Group Managing Director and Deputy Chairman is responsible for managing the business and ensuring the successful implementation of Group policies, while maintaining operational performance[41] - The Company Secretary ensures that board procedures are followed and activities are conducted efficiently, maintaining detailed minutes of all meetings[56] Risk Management - The Board is responsible for the Group's risk management system and internal control, continuously reviewing the effectiveness of these systems[85] - The Group has established an Enterprise Risk Management (ERM) framework consistent with the COSO framework to manage strategic, financial, operational, and compliance risks[88] - The Group's risk management policy is reviewed annually, identifying and prioritizing significant risks, with mitigation plans established for those deemed significant[89] - The Board of Directors conducts an annual review of the effectiveness of the Group's risk management and internal control systems, considering the ability to cope with business transformation and external changes[90] - The internal audit function assists in monitoring the risk management and internal control systems, reporting significant deficiencies to the Audit Committee and Board of Directors[88] Employee Relations - The Group employed approximately 560 employees, with about 63% located in Mainland China[15] - The employee turnover rate in FY2020 was 13.55%, with rates of 11.29% in Hong Kong, 9.09% in Macau, and 15.01% in Mainland China[148] - The company has established a comprehensive training program covering product knowledge, service skills, and managerial competencies for employee development[152] - Employee compensation is determined based on local industrial averages, experience, and qualifications[144] - The company provides all staff with medical insurance and competitive fringe benefits to facilitate access to healthcare services[136] Environmental, Social, and Governance (ESG) Initiatives - The Company conducted a materiality assessment to identify key ESG issues, engaging both internal and external stakeholders[121] - The Company is committed to complying with the latest laws and regulations in its ESG practices, with regular revisions communicated to staff[114] - The Company aims for green operations and sustainable development through its established ESG goals and missions[113] - The company has implemented measures to reduce energy consumption and resource use, resulting in a decrease in overall consumption compared to FY2019[163] - The company has established environmentally friendly initiatives to reduce greenhouse gas emissions, reflecting its commitment to sustainability[190] Audit and Compliance - The Audit Committee held 4 meetings during the year ended March 31, 2020, with full attendance from all members[68] - The Audit Committee is responsible for overseeing the relationship with external auditors and reviewing the Group's financial statements[68] - The Group's external auditors, Deloitte, are engaged for audit services, ensuring compliance with accounting principles generally accepted in Hong Kong[70] - The Audit Committee reviews the effectiveness of the audit process and the independence of external auditors[70] - The Directors acknowledge their responsibility for preparing the Annual Report and financial statements to ensure a true and fair presentation[66]
东方表行集团(00398) - 2020 - 年度财报