Financial Performance - The Group recorded a consolidated revenue of approximately HK$37.2 million for the year ended 31 March 2021, a decrease of approximately HK$30.2 million or 44.9% from last year's revenue of approximately HK$67.4 million[14][18]. - The audited consolidated loss attributable to shareholders for the year was approximately HK$8.8 million, with a loss per share of HK$0.45 based on 1,946,314,108 ordinary shares[12][16]. - The net loss improved by approximately HK$14.4 million compared to last year's net loss of approximately HK$23.2 million[21][23]. - The decline in revenue resulted in a loss of profit margin of approximately HK$20.5 million, offset by reductions in staff costs (approximately HK$11.5 million) and depreciation charges (approximately HK$10.4 million)[21][23]. - The Group's restaurant business continued to be the major revenue contributor, significantly impacted by COVID-19 restrictions, leading to revenue declines of approximately HK$18.1 million and HK$12.1 million in the first and second halves of the financial year, respectively[20][22]. - The Group recognized approximately HK$5.7 million in subsidies from the Hong Kong government during the financial year[21][23]. - The net loss for the year under review was approximately HK$8.8 million, compared to a net loss of approximately HK$23.2 million for the previous year[44]. - Other income significantly increased due to approximately HK$5.7 million in subsidies granted by the Hong Kong Government under various anti-epidemic fund relief schemes[45]. Property Development - Construction of a low-rise apartment building in Camden, New South Wales, Australia, is ongoing, with completion expected in the third quarter of 2021 despite some delays due to weather and COVID-19 restrictions[25]. - The property development project in Australia is seen as a suitable opportunity for the Group to expand its business activities and diversify risks[35]. - As of 31 March 2021, the capitalized contract costs for the Australian property development project amounted to approximately A$7.6 million (HKD 45.8 million), representing around 60% of the total construction costs[74][76]. - The Group recognized an exchange gain of approximately HK$3.7 million from the revaluation of intercompany loans denominated in Australian dollars for property development operations[45]. - The diversification into the property development industry in Australia is expected to provide additional income sources and positive returns for the Group and its shareholders[90][91]. COVID-19 Impact - In February 2020, the Group's revenue dropped by 73% year-on-year due to the impact of COVID-19, with significant cancellations of banquet and corporate bookings[56]. - During the second wave of COVID-19 from March to April 2020, the Group's revenue fell by over 50% compared to the same period last year, with business improving slightly in May and June but still down approximately 30% year-on-year[61]. - The third wave of COVID-19 from July to September 2020 resulted in a 65% year-on-year revenue decline, with August 2020 seeing a drop of over 90% due to dine-in restrictions[63]. - In December 2020, the Group's revenue decreased by over 75% year-on-year, and in January 2021, it fell by nearly 80% due to stringent social distancing measures[70]. - In February and March 2021, despite a 45% increase in revenue compared to the same months in the previous year, it remained 50% below the Group's target sales[68]. - The Group's revenue in February and March 2021 improved by 45% compared to the previous year, but was still 50% short of the target sales[72]. Corporate Governance - The Company has complied with the Corporate Governance Code throughout the year ended 31 March 2021, except for specific provisions regarding the separation of roles and appointment letters for directors[97]. - The Board consists of four executive directors and three independent non-executive directors, with a resignation and appointment occurring on 23 June 2021[103]. - During the year ended 31 March 2021, the Board held six meetings and one general meeting, with individual attendance rates varying among directors[107]. - The Company has maintained sufficient independent non-executive directors on the Board, complying with Listing Rules since 1 December 2012[111]. - The directors acknowledge their responsibility for preparing financial statements that reflect the Group's financial position accurately[115]. - The Board recognizes its responsibility for establishing and reviewing risk management and internal control systems[116]. - The Group's risk management and internal control systems are governed by a set of policies and guidelines outlined in the internal control manual[120]. - The Board conducted an annual review of the risk management and internal control systems, finding them adequate and effective[121]. - The remuneration committee held one meeting during the year ended March 31, 2021, to review and recommend remuneration packages based on individual responsibilities and market conditions[131]. - The nomination committee reviewed the board's composition and diversity, assessing the independence of independent non-executive directors during the year ended March 31, 2021[135]. - The company has established a clear organizational structure with defined responsibilities and authorization limits to mitigate risks[122]. - The company emphasizes continuous professional development for directors to ensure their contributions remain informed and relevant[129]. - The roles of chairman and chief executive are currently held by the same individual, which the Board believes does not lead to undue concentration of power[124]. - The company has a policy regarding board member diversity, considering factors such as gender, age, and professional experience[135]. - The remuneration committee consists of three independent non-executive directors, ensuring oversight of executive compensation[131]. - The company has established a clear framework for the segregation of duties to reduce the risk of manipulation or error[122]. - The independent non-executive directors are subject to retirement by rotation at least once every three years, aligning with corporate governance standards[126]. - The nomination committee reviewed the structure, size, composition, and diversity of the Board at least annually, ensuring it aligns with the Group's corporate strategy[136]. - The nomination committee held one meeting during the year ended 31 March 2021, assessing the independence of INEDs and the Board's diversity[136]. - The audit committee, comprising three INEDs, held two meetings during the year ended March 31, 2021, reviewing audit findings and financial statements[142]. - The audit fees for the year ended 31 March 2021 amounted to HKD 450,000, while non-audit fees were HKD 121,000, totaling HKD 571,000[144]. - The company secretary has been in position since 17 February 2006 and complied with the qualification and training requirements under the Listing Rules for the year ended 31 March 2021[149]. - The Board reviewed the Group's corporate governance policies and compliance with legal and regulatory requirements for the year ended 31 March 2021[148]. - The nomination committee's policy on diversity includes considerations of gender, age, cultural background, and professional experience[136]. - The audit committee recommended the Board to adopt the interim and annual reports for 2020/21[142]. - The attendance rate for the nomination committee members was 100% during the year ended 31 March 2021[138]. Shareholder Communication - The company encourages direct communication with shareholders for any inquiries regarding the Board[152]. - Shareholders holding not less than one-tenth of the paid-up capital can request a special general meeting to address specified matters[161]. - The company has not made significant changes to its Memorandum of Association and Bye-laws during the year ended 31 March 2021[160]. - The company encourages shareholders to maintain direct communication and can address inquiries through the company secretary[154]. - The process of the company's general meetings will be regularly monitored and reviewed to ensure shareholders' needs are met[156]. - The company allows shareholders to appoint proxies to attend and vote at meetings if they are unable to attend[156]. - The company has a commitment to ensuring the best service for shareholders during general meetings[156]. Management and Operations - The Group is an investment holding company primarily engaged in operating restaurants specializing in Chiu Chow Cuisine in Hong Kong[189]. - For the year ended March 31, 2021, the Board resolved not to recommend the payment of a final dividend, consistent with the previous year where no dividend was paid[190]. - The annual report includes a fair review of the Group's business performance, principal risks, and uncertainties, as well as future development discussions[191]. - The financial risk management objectives and policies of the Group are detailed in note 6 of the consolidated financial statements[191]. - The Group maintained good relationships with employees, customers, and suppliers, with no significant disputes reported during the review year[194]. - The Company has complied with applicable laws and regulations, with no major violations impacting its business operations reported during the review year[193]. - The largest supplier accounted for 17% of the Group's purchases, while the five largest suppliers together accounted for 44%[200]. - The aggregate revenue from the five largest customers was less than 30% of the Group's total revenue for the year[200]. - The Group is committed to environmental sustainability and compliance with relevant laws and regulations[197][198]. - There were no material breaches of applicable laws and regulations that significantly impacted the Group's business operations[198]. - The Group maintained good relationships with employees, customers, and suppliers, with no significant disputes reported during the year[199].
环科国际(00657) - 2021 - 年度财报