Business Overview - The group aims to become one of the most outstanding financial and business information and service companies in the Greater China region[4]. - The core business of the group is the publication of the Hong Kong Economic Times, established in 1988, which is a leading financial newspaper in Hong Kong[14]. - The group operates five major business sectors: finance, real estate, quality living, human resources, and education[14]. - The group launched a free newspaper, "Sunny Daily," in 2011 to diversify its offerings[14]. - The group has a strong market presence with its various publications and services, including economic news agency "Economic Times" and job recruitment platform "CTgoodjobs"[25]. Awards and Recognition - The group has received multiple awards, including the first place for the local financial information website (hket.com) for six consecutive years[26]. - The group has been recognized for its contributions to the banking and finance sector through various awards, including the "Banking & Finance Awards" and "FinTech Awards"[18][20]. Financial Performance - The group's revenue decreased by 12% to HKD 999 million for the fiscal year, with advertising revenue from print publications significantly declining[28]. - Digital advertising revenue saw significant growth, partially offsetting losses from print advertising[28]. - The group reported a significant increase in user engagement across its digital platforms, reflecting a growing trend in digital media consumption[24]. - Revenue for the fiscal year ended March 31, 2021, decreased to HKD 999,937,000, a decline of 12% compared to HKD 1,131,823,000 in the previous fiscal year[88]. - Gross profit margin improved to 41.6%, up 2.4 percentage points from 39.2% in the previous year[97]. - Shareholders' profit increased to HKD 30,916,000, a rise of 192% from HKD 10,573,000 in the previous fiscal year[88]. - Advertising revenue fell by 12% to HKD 523,756,000, primarily due to a significant drop in print advertising amid the pandemic[93]. - Service revenue decreased by 11% to HKD 406,799,000, attributed to reduced print volumes and promotional activities[94]. - The effective tax rate for the fiscal year was approximately 7.4%, down from a tax expense in the previous year, influenced by government subsidies[99]. - The media division experienced losses, but digital advertising revenue showed growth, serving as a key growth driver[102]. - The financial news agency and software business segment reported improved performance, benefiting from a robust IPO market and active trading in securities[102]. - The net current assets increased by HKD 81 million from HKD 356.8 million to HKD 437.8 million as of March 31, 2021[103]. - The cash balance as of March 31, 2021, was HKD 470.5 million, up from HKD 386.8 million as of March 31, 2020[107]. - The group received a subsidy of HKD 77 million under the "Employment Support Scheme" from the Hong Kong government[103]. - The group aims to maintain a sustainable dividend policy and sufficient liquidity for strategic business investments[109]. Digital Transformation - The group emphasizes digital business development to meet changing reader demands and enhance interactive content[24]. - The group is investing in digital technologies, including data and analytics tools, to enhance user experience and meet the growing demand for targeted marketing[29]. - The core business unit "Economic News" successfully transitioned all professional real-time financial terminals to an innovative platform, allowing clients to access it easily via computers or mobile devices[32]. - The group plans to continue investing in talent and technology for mobile platform development to meet the increasing demand for mobile banking and securities trading services[32]. - The company plans to continue investing in digital platforms and enhancing quality content to drive sustainable growth[102]. Corporate Governance - The board consists of eight directors, with three independent non-executive directors, representing one-third of the board members[50]. - The company adheres to the corporate governance code as per the Hong Kong Stock Exchange listing rules[49]. - The independent non-executive directors bring extensive experience in banking, finance, trade, and real estate investment[44][46][47]. - The company has established various committees, including an audit committee and a remuneration committee, to enhance governance[49]. - The board is committed to maintaining high standards of corporate governance and protecting shareholder interests[49]. - The company encourages all directors to participate in ongoing professional development to enhance their knowledge and skills[59]. - The board believes that appointing the same individual as both chairman and CEO allows for more effective and efficient development of long-term business strategies[54]. - The board is responsible for setting the group's development direction and overseeing business performance, while operational matters are delegated to qualified management personnel[54]. - The company aims to hold at least four board meetings annually, approximately one each quarter[65]. - The board's composition includes experienced and capable individuals, with many members being non-executive directors to ensure balanced power distribution[54]. - The Nomination Committee held one meeting during the fiscal year ending March 31, 2021, with all members present, reviewing the board's composition and providing recommendations for reappointment of directors[70]. - All independent non-executive directors confirmed their independence in accordance with the listing rules[57]. - The company has a diverse board composition that reflects the necessary skills and experiences for its business[51]. - The board members have service contracts that comply with the company's articles of association regarding rotation and re-election[51]. - The board of directors has adopted a diversity policy aimed at achieving diversity through various factors, including gender, age, culture, and professional experience[55]. - The audit committee conducted two meetings during the fiscal year and reviewed the annual report and financial statements for the year ending March 31, 2021[66]. - The remuneration committee held one meeting during the fiscal year to review and approve the compensation and discretionary bonuses for executive directors and senior management[69]. - The total fees incurred for the external auditor, PricewaterhouseCoopers, for the fiscal year 2020/21 amounted to HKD 2,702,000 for interim review and audit services, with an additional HKD 316,000 for other services[77]. - The board confirmed its responsibility for the preparation of financial statements that fairly reflect the group's financial position, performance, and cash flows, adhering to relevant laws and listing rules[76]. - The company has established procedures to identify, assess, and manage significant risks in financial, operational, and compliance areas, with management responsible for annual evaluations of identified risks[80]. - The company maintains an internal audit function that continuously reviews major operational and financial controls and risk management systems across all key business operations[80]. - The company has adopted the standard code for securities transactions by directors, with all directors confirming compliance during the fiscal year ending March 31, 2021[73]. - The external auditor, PricewaterhouseCoopers, has been engaged since the 2004/05 fiscal year, and the audit committee has recommended their reappointment, pending shareholder approval[77]. - The company secretary has fulfilled the training requirements as stipulated in the code provisions during the fiscal year ending March 31, 2021[81]. - The board is committed to maintaining shareholder rights and ensuring transparency regarding the company's business performance and operations[82]. Risk Management and Impairment - The company has not disclosed any significant related party transactions that would constitute a connected transaction under the listing rules[145]. - The total trade receivables of the group amounted to HKD 185.6 million as of March 31, 2021, with a significant portion attributed to media division clients[162]. - The management's assessment of expected credit losses for trade receivables involves high levels of estimation uncertainty and subjectivity, particularly for clients with known financial difficulties[165]. - The group applies expected credit loss ratios based on historical credit losses over the past two years, adjusted for current and forward-looking information[165]. - The audit focused on the impairment provision for trade receivables in the media division due to the significant amount and inherent risks associated with management's estimates[166]. - Management's evaluation of impairment indicators for cash-generating units is conducted in accordance with HKAS 36 "Impairment of Assets"[180]. - As of March 31, 2021, the cash-generating unit in the printing segment reported a loss greater than management's original budget, indicating potential impairment of property, plant, and equipment totaling HKD 72,893,000 and right-of-use assets amounting to HKD 6,885,000[182]. - Management conducted impairment assessments using market research to estimate fair value less costs of disposal and discounted cash flow forecasts, determining the recoverable amount based on the higher of these two methods[184]. - The impairment provisions recognized by management as of March 31, 2021, were HKD 72,893,000 for property, plant, and equipment and HKD 6,885,000 for right-of-use assets[184]. - Key assumptions in the discounted cash flow forecasts included revenue growth rates and discount rates, which were compared against historical performance and industry benchmarks[185]. - Sensitivity analysis was performed to assess how changes in key assumptions could impact asset impairment, with discussions held with management regarding the likelihood of such changes[185]. Audit and Compliance - The company’s directors are responsible for preparing financial statements that are true and fair in accordance with Hong Kong Financial Reporting Standards and the Companies Ordinance[189]. - The auditors evaluated the appropriateness of accounting policies and the reasonableness of accounting estimates and disclosures made by the directors[195]. - The audit aimed to obtain reasonable assurance that the financial statements are free from material misstatement due to fraud or error[193]. - The company must disclose any significant uncertainties related to its ability to continue as a going concern in the financial statements[195]. - The total amount of impairment provisions reflects a high degree of estimation uncertainty and subjectivity in management's judgments[184].
经济日报集团(00423) - 2021 - 年度财报