Financial Performance - The group recorded revenue of approximately HKD 956.4 million for the year ended March 31, 2021, a decrease of about 30.8% compared to HKD 1,381.5 million for the year ended March 31, 2020[8]. - The group's revenue for the year was approximately HKD 956.4 million, a decrease of about 30.8% compared to approximately HKD 1,381.5 million in the previous year, primarily due to restaurant closures and a sharp decline in the number of inbound travelers and local diners[28]. - The group's gross profit was approximately HKD 671 million, a decrease of 31.5% from approximately HKD 979.1 million in the previous year[30]. - Employee costs for the year were approximately HKD 311.8 million, a decrease of about 38.2% from approximately HKD 504.2 million in the previous year[31]. - The total depreciation and amortization for the year was approximately HKD 265.4 million, accounting for about 27.7% of the group's revenue, an increase from 22.4% in the previous year[35]. - Property rental and related expenses decreased by 75.5% to approximately HKD 21.9 million from approximately HKD 89.6 million in the previous year[36]. - Other operating expenses decreased by about 33.0% to approximately HKD 192.2 million, representing about 20.1% of the group's revenue[37]. - The group recorded a post-tax loss of approximately HKD 126.1 million for the year, compared to a loss of approximately HKD 319.7 million in the previous year[43]. - As of March 31, 2021, the group's cash and cash equivalents were approximately HKD 167.2 million, a decrease of about HKD 70.2 million from approximately HKD 237.4 million in the previous year[47]. - The current ratio was approximately 0.7 times as of March 31, 2021, down from approximately 0.8 times in the previous year[47]. - As of March 31, 2021, the company's debt-to-equity ratio was approximately 9.3%, compared to 8.4% in 2020[48]. Business Strategy and Expansion - The group expanded its business into e-commerce and launched an online platform to increase customer base and revenue sources[8]. - The group plans to actively explore new business models and develop new brands to adapt to changing consumer spending patterns[11]. - The group aims to accelerate overseas market expansion and increase market share in Hong Kong, Macau, and mainland China[11]. - The group has established a strategic partnership with Jumbo Group in Singapore to further develop the Singapore market[9]. - The group opened 15 new restaurants during the year, with 8 located in Hong Kong and 7 in mainland China, while closing 19 restaurants, including 15 in Hong Kong[24]. - The group expanded its business into e-commerce by launching an online platform for exclusive bakery products, aiming to tap into the growing online shopping trend[19]. - In mainland China, the group saw a significant rebound in business as most restaurants gradually resumed operations, particularly in residential areas[22]. - The group has 22 restaurants operating in the Greater Bay Area, with six opened during the fiscal year, capitalizing on the region's strong consumer spending power[22]. - The group actively promoted takeaway services and collaborated with popular delivery platforms to enhance service coverage and customer satisfaction[18]. - The company plans to diversify its business and revenue sources by actively exploring new platforms and developing new brands[60]. - The company aims to accelerate its entry into overseas markets and the Guangdong-Hong Kong-Macao Greater Bay Area, enhancing marketing efforts to expand its customer base[60]. Cost Management and Financial Support - The group adjusted takeaway discounts and enhanced delivery services through its delivery team to mitigate the impact of reduced foot traffic[8]. - The group received approximately HKD 55.4 million in government subsidies from the anti-epidemic fund and the "Employment Support Scheme" to alleviate financial pressure[27]. - The company is taking decisive measures to control costs, such as rent and labor costs, to maintain profit margins[60]. - The company has a strong cash flow and resource reserves, allowing it to improve operations and seize attractive business opportunities[61]. - The group implemented cost control measures, including a 30% salary reduction for board members and senior management from February 1 to July 31, 2020, followed by a 15% reduction until the report date[17]. Corporate Governance - The company has maintained compliance with all provisions of the corporate governance code throughout the year[84]. - The board of directors held a total of 6 meetings during the year, with all directors attending the annual general meeting[95]. - The company emphasizes high levels of corporate governance to protect shareholder interests and enhance corporate value[83]. - The chairman and CEO roles are separated, ensuring effective leadership and management oversight[96]. - The company has a strong management team with over 30 years of experience in the restaurant industry[80]. - The independent non-executive directors have consistently attended all board meetings, demonstrating commitment to governance[95]. - The audit committee is chaired by an independent non-executive director, ensuring transparency and accountability[83]. - The company has established various committees to oversee significant transactions and risk management[86]. - The management team is responsible for executing the board's decisions and monitoring operational plans[86]. - The company has a robust internal control system in place to manage financial and operational risks[86]. - 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 independent directors as per listing rules[99]. - The company has received written annual confirmations of independence from all independent non-executive directors, ensuring their independence and impartial judgment[100]. - The board has established nomination, remuneration, and audit committees to oversee specific areas of the company's affairs, with sufficient resources to perform their duties[112]. - The nomination committee evaluates the board's structure and composition, ensuring diversity in skills, education, and experience, which is deemed appropriate for effective management[113]. - The company has implemented a standard code of conduct for directors' securities trading, ensuring compliance with listing rules[108]. - All directors have confirmed compliance with the trading standards set out in the standard code during the year[111]. - The company provides comprehensive training for directors to ensure they understand their responsibilities under regulatory requirements and corporate governance policies[106]. - The independent non-executive director, Mr. Yan, is a senior member of the UK Chartered Association of Certified Accountants, ensuring appropriate professional qualifications on the board[99]. - The company has adequate and sufficient directors' and officers' liability insurance to protect against legal claims arising from their duties[102]. - The nomination committee will continue to review the board diversity policy to ensure its ongoing effectiveness[116]. - The Nomination Committee reviewed the board's structure, size, and diversity during the year[124]. - The Remuneration Committee held three meetings this year, with all members present[126]. - The Audit Committee reviewed the 2020 annual report and the interim report for the six months ending September 30, 2020[135]. - The company has one senior management member earning between HKD 2,500,001 and HKD 3,000,000[141]. - The Nomination Committee provided recommendations for the re-election of directors at the annual general meeting[124]. - The Audit Committee evaluated the independence of external auditors and reviewed their audit results[135]. - The company has established a whistleblowing policy applicable to all stakeholders[138]. - The Remuneration Committee assessed the performance of all directors and senior management[128]. - The board conducted a review of corporate governance policies and practices during the year[136]. - The company has a member earning less than HKD 1,000,000 in the senior management group[141]. - The independent auditor's fees for the year amounted to HKD 1,680,000[143]. - The board confirmed the effectiveness of the group's risk management and internal control systems, with no significant issues identified during the annual review[150]. - The risk management framework is based on a "three lines of defense" model, ensuring clear roles and responsibilities across the organization[149]. - The internal audit team conducts regular audits of financial, operational, and compliance controls, reporting directly to the audit committee[149]. - The company emphasizes the importance of transparent and timely communication with shareholders to build investor confidence[157]. - The board is responsible for overseeing the company's strategic development and setting the group's objectives and policies[155]. Market Conditions and Industry Challenges - Total revenue for the restaurant industry in Hong Kong dropped from HKD 112.5 billion in 2019 to HKD 79.4 billion in 2020, marking the largest annual decline in history[16]. - The restaurant industry has faced significant challenges since the second half of 2019, particularly due to the pandemic, leading to a decline in customer numbers[178]. - The company's main business involves investment holding, with subsidiaries primarily engaged in restaurant operations and food sales[179]. - The company has been listed on the stock exchange since November 26, 2012[180]. - There were no significant disputes with suppliers, customers, or other stakeholders during the year[182]. - The company did not recommend a final dividend for the year, consistent with the previous year[187]. - The company has complied with all major legal and regulatory requirements, with no significant violations reported during the year[181]. - The company maintains a strong focus on food safety and quality, adhering to international food standards[181]. - The company has established compliance and risk management policies to monitor adherence to legal and regulatory requirements[181]. - The company's financial performance details are available in the consolidated income statement and other comprehensive income statement on pages 51 and 52 of the annual report[185]. - The company's cash flow situation is analyzed in the consolidated cash flow statement on pages 56 and 57 of the annual report[186]. - There were no stock options granted, exercised, or canceled during the year under the stock option plan[198].
翠华控股(01314) - 2021 - 年度财报