Financial Performance - The company reported a revenue of HKD 1,381,500,000 for the fiscal year ending March 31, 2020, a decrease of approximately 22.7% compared to HKD 1,786,800,000 in the previous year[7]. - The company recorded a total loss after tax of approximately HKD 319,700,000 for the year, with a loss of HKD 194,700,000 after excluding non-cash items[7]. - The group's revenue decreased by approximately 22.7% from about HKD 1,786,800,000 in 2019 to about HKD 1,381,500,000 in the current year due to weakened market conditions and a sharp decline in dining out during the pandemic[18]. - Gross profit fell by 24.1% to approximately HKD 979,100,000 compared to HKD 1,289,300,000 in 2019, primarily due to reduced revenue and increased cost of goods sold[20]. - The company's share of profits from joint ventures decreased by approximately HKD 10.9 million or 32%, from HKD 34.1 million in 2019 to about HKD 23.2 million in 2020, largely impacted by the pandemic[35]. - For the fiscal year ending March 31, 2020, the company reported a loss of approximately HKD 319.7 million, compared to a profit of about HKD 4.7 million in 2019, primarily due to reduced operating income and non-cash impairment losses[37]. - Total operating expenses increased to HKD 286.9 million in 2020 from HKD 201.9 million in 2019, with significant increases in impairment losses on property, plant, and equipment amounting to HKD 81.0 million[31]. - The company's cash and cash equivalents decreased by approximately HKD 187.1 million, from HKD 424.5 million in 2019 to about HKD 237.4 million in 2020[38]. - The current ratio as of March 31, 2020, was approximately 0.8 times, which would improve to about 1.6 times when excluding lease liabilities under the new accounting standard[38]. Cost Control Measures - The company implemented a 30% salary reduction for all board members and senior management starting February 1, 2020, as part of cost control measures[8]. - The company aims to negotiate more competitive rental agreements with landlords to further reduce operating costs[10]. - Employee costs decreased by about HKD 71,300,000 to approximately HKD 504,200,000, with the total number of employees at 3,029 as of March 31, 2020[20]. - Other operating expenses increased by approximately 42.1% to about HKD 287,000,000, accounting for about 20.8% of the group's revenue, largely due to impairment assessments on assets[29]. - Cost control measures are being taken to safeguard profit margins, including managing rental and labor costs[53]. Business Strategy and Adaptation - The company plans to increase efforts in promoting takeaway services and exploring new business models in response to market changes[10]. - The group actively promoted takeaway services and provided discounts, contributing positively to business during challenging times[16]. - The company adjusted its restaurant network and operating hours in response to actual market demand, with some restaurants temporarily closing[8]. - The group has seen a significant rebound in business in mainland China since the end of March 2020, with some restaurants gradually resuming operations[53]. - The group is actively promoting takeaway services and implementing various marketing campaigns to attract more customers[53]. - The group aims to diversify its business by developing new brands, which will serve as future growth and profit engines[53]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the Hong Kong Stock Exchange's listing rules throughout the fiscal year ending March 31, 2020[78]. - The board of directors held four meetings during the fiscal year, with all directors attending at least 75% of the meetings[82]. - The board consists of nine members, including three executive directors, three non-executive directors, and three independent non-executive directors, meeting the requirement of at least one-third being independent[86]. - The roles of the chairman and the CEO are separated, ensuring independent leadership and management oversight[85]. - The company has maintained appropriate and sufficient directors' and officers' liability insurance to protect against legal claims arising from their duties[90]. - The independent non-executive directors have confirmed their independence in accordance with the listing rules, with no known circumstances affecting their impartiality[88]. - The board is responsible for approving and monitoring all policy matters, overall strategy, and budget, as well as internal controls and risk management systems[80]. - The company has established various board committees, including a nomination committee and a remuneration committee, to enhance governance practices[86]. - The company ensures that all directors are adequately informed about significant matters and receive relevant information in a timely manner[80]. - The company has a policy for the appointment and rotation of directors, ensuring that all directors are eligible for re-election at least every three years[91]. Shareholder Communication and Dividends - The company maintains transparent communication with shareholders and investors through annual reports, interim reports, and timely announcements[142]. - The company did not declare an interim dividend for the six months ended September 30, 2019, compared to a dividend of HKD 0.01 per share totaling approximately HKD 14,112,000 in 2018[167]. - The board of directors does not recommend the payment of a final dividend for the year, similar to the previous year where a dividend of HKD 0.01 per share was also declared totaling approximately HKD 14,112,000[168]. - The company has adopted a dividend policy to distribute no less than 30% of its profit as dividends, subject to the board's discretion based on various factors[152]. - The company will continue to review its dividend policy and does not guarantee the declaration of dividends in any specific period[153]. Management Team Experience - The company has a strong management team with extensive experience in the restaurant industry, with Mr. Pang having over 30 years of experience in strategic development and management[74]. - Mr. Huang served as the Chief Financial Officer of Dongsheng Tourism Group Limited from October 2014 to October 2018, overseeing financial operations and strategic decisions[64]. - Mr. Yang has over 15 years of experience in auditing, financial management, and compliance, having held various financial roles in listed companies[68]. - Mr. Deng has over 20 years of experience in international investment and corporate banking, previously working with major banks like Merrill Lynch and UBS[70]. - Mr. Tang, the Chief Operating Officer, has over 20 years of management experience, focusing on business development in the Chinese market[75]. Risk Management and Compliance - The company confirmed its responsibility for the accuracy of the financial statements and acknowledged no significant uncertainties affecting its ability to continue as a going concern[126]. - The risk management framework is based on a "three lines of defense" model, clearly defining roles and responsibilities across the board, audit committee, senior management, and internal audit team[130]. - The audit committee conducts an annual review of the effectiveness of the group's risk management and internal control systems, finding them effective and adequate[134]. - The company is aware of its responsibilities under the Securities and Futures Ordinance and has developed an inside information disclosure policy in line with guidelines from the Securities and Futures Commission[136]. - The company has implemented a whistleblowing policy applicable to all stakeholders, allowing confidential reporting of any misconduct[121].
翠华控股(01314) - 2020 - 年度财报