Financial Performance - Hong Kong business revenue decreased by 3.2% year-on-year to HKD 4.239 billion, down from HKD 4.3769 billion in 2018[42]. - The Hong Kong segment recorded a loss of HKD 114.8 million, compared to a profit of HKD 9.1 million in 2018[42]. - In China, revenue slightly declined by 0.8% to HKD 5.2548 billion, down from HKD 5.299 billion in 2018[45]. - The total revenue for the group was HKD 9.438 billion, a decrease from HKD 9.679 billion in 2018, with a gross margin of 29.9% compared to 31.0% in the previous year[45]. - The board proposed a final dividend of HKD 0.05 per share, down from HKD 0.22 per share in 2018, resulting in a total dividend of HKD 0.27 per share for the year[45]. - As of December 31, 2019, the company's distributable reserves included retained earnings of HKD 659,309,000, down from HKD 1,217,000,000 in 2018[197]. - The group reported a mid-term dividend of HKD 0.22 per share, totaling HKD 57,200,000, and proposed a final dividend of HKD 0.05 per share, amounting to HKD 13,000,000[195]. Strategic Initiatives - The company's revenue structure reform aims to increase the sales proportion of private label brands to improve profit margins and overall profitability[33]. - The company plans to implement a multi-channel development strategy to enhance customer loyalty and improve operational efficiency[34]. - The company aims to leverage its purchasing network from the AEON Group in Japan to enhance revenue capabilities and provide a wider variety of quality products[33]. - The group plans to open 7 new stores in China in 2020, focusing on small supermarkets in Guangzhou[2]. - The total capital expenditure for 2020 is expected to be approximately HKD 299.7 million, primarily for store renovations and new store openings[3]. - The group intends to strengthen its online supermarket services and improve customer relationship management strategies in 2020[2]. - The group aims to enhance its product offerings by increasing the development and sales of TOPVALU products in China[2]. Digital Transformation - The company is committed to digital transformation initiatives, including self-checkout systems and QR code shopping, to adapt to changing consumer demands[34]. - The introduction of the AEON APP "AEON Home Delivery" received positive feedback and is set for a full launch in the first half of 2020, enhancing customer convenience[34]. - The group introduced a new self-service payment system to improve the shopping experience and reduce checkout times[40]. - The group completed the upgrade of its ERP system to enhance productivity and operational efficiency[41]. - The group is focusing on digital transformation in daily operations to enhance efficiency and reduce manpower requirements[2]. Environmental Sustainability - In 2019, the total direct carbon dioxide emissions from the group's kitchen operations amounted to 899 tons, a decrease from 969 tons in 2018[74]. - Indirect carbon dioxide emissions from electricity consumption in 2019 totaled 122,463 tons, up from 110,093 tons in 2018[74]. - The group recycled 2,272 tons of food waste in 2019, down from 3,429 tons in 2018[75]. - A total of 70,778 liters of used cooking oil were collected for recycling into biodiesel in 2019, compared to 72,252 liters in 2018[75]. - The group's electricity and gas consumption for the year was 171,400,000 kWh and 14,300,000 MJ, respectively, compared to 152,500,000 kWh and 15,500,000 MJ in 2018[77]. - Water usage for the year was 1,280,000 cubic meters, a decrease from 1,340,000 cubic meters in 2018[77]. - The group distributed 206,700 kilograms of shopping bags and packaging materials in the year, down from 235,800 kilograms in 2018[78]. - The company aims to achieve a balance between environmental protection and enriching lives through its environmental policy[68]. - The group emphasizes sustainable procurement practices to preserve limited natural resources in fisheries and agriculture[79]. Corporate Governance - The company has maintained high levels of corporate governance practices to enhance shareholder value and interests[125]. - The board regularly reviews corporate governance practices to ensure compliance with regulatory requirements[125]. - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange listing rules[125]. - The company has complied with the code provisions throughout the year ending December 31, 2019, except for certain deviations disclosed in the report[126]. - The board consists of 10 members, including 4 executive directors, 2 non-executive directors, and 4 independent non-executive directors, with independent directors making up one-third of the board[128]. - The board held a total of 7 meetings during the year, with all meetings properly notified at least 14 days in advance[134]. - The company has adopted a diversity policy for board members, considering factors such as gender, age, cultural background, and professional experience to enhance performance and sustainability[129]. - The company has a nomination policy that outlines key selection criteria for appointing or reappointing directors to ensure a balance of skills and diversity[144]. - The company emphasizes the importance of continuous professional development for directors, ensuring they stay updated on business performance and regulatory requirements[150]. Employee Engagement and Training - AEON established various employee training programs, including a basic education program for new hires and an internal certification system for specific roles[87]. - AEON's collaboration with Tsinghua University aims to enhance human resource development in social sciences, inviting selected talents for specialized courses[91]. - AEON's employee performance evaluations occur biannually, focusing on work challenges and future career development[86]. - AEON's employee training includes a code of conduct review to reinforce ethical standards and shared values among staff[92]. - As of December 31, 2019, the group employed approximately 6,600 full-time and 3,800 part-time employees in Hong Kong and China[55]. Community Engagement - AEON donated approximately HKD 1.8 million worth of goods to 122 charitable organizations through the "AEON Happy Yellow Receipt" initiative, contributing 1% of the total receipts collected[101]. - AEON collected nearly 186,200 books and raised about HKD 1.1 million for educational projects in impoverished areas of China through the annual "Used Book Recycling Charity Sale" campaign[104]. - AEON provided over 20,000 items to food banks, valued at more than HKD 500,000, to assist low-income families[105]. - AEON planted nearly 50 trees as part of its community engagement initiatives, promoting a green lifestyle[101]. Risk Management - The board is responsible for overseeing the risk management and internal control systems of the group, which includes a self-assessment matrix for risk control[178]. - The risk control self-assessment matrix focuses on nine major categories of enterprise risk factors, including financial, product and service, and information security risks[179]. - The internal audit team evaluates the efficiency and effectiveness of the risk management and internal control systems, reporting results to management and the audit committee twice a year[179]. - The company established a related party transaction group to assist the board in reviewing and monitoring existing and proposed related party transactions[181].
永旺(00984) - 2019 - 年度财报