Business Environment and Market Conditions - The company faced a challenging business environment due to trade wars, geopolitical conflicts, and a global economic slowdown, with Hong Kong's GDP declining by 8.9% year-on-year in Q1 2020, marking the largest drop on record[9] - The company anticipates a gradual recovery in the restaurant market as the Hong Kong government introduces anti-epidemic funds and support measures, with expectations for the economy to bottom out in Q3 2020[10] - The overall revenue of the Hong Kong restaurant industry is estimated to have decreased by about 5.9% to HKD 113 billion in 2019[128] - The first quarter of 2020 saw a year-on-year GDP decline of 8.9% in Hong Kong, marking the largest quarterly drop on record[128] Company Operations and Strategy - Despite the adverse conditions, the company continued to optimize its multi-brand network in mainland China and Hong Kong, operating brands such as Italian Tomato, Ginza Bairin, and White Bear Curry[10] - The company is exploring opportunities in the healthcare sector, driven by reforms in the mainland healthcare system and rising demand for medical services, aiming to diversify its business portfolio and create new revenue streams[12] - The group plans to focus on expanding the White Bear Curry brand, which currently has 6 self-operated stores and 1 franchise store in China, with potential new franchise locations identified[132] - The company operates a series of Japanese food-related concepts, including the Italian Tomato brand, which remains the primary source of revenue[129][130] Corporate Governance - The board consists of five members, including two executive directors and three independent non-executive directors, complying with GEM listing rules[18] - The independent non-executive directors have no business or financial interests in the group, ensuring their independence[22] - The chairman and CEO roles are clearly separated, ensuring compliance with corporate governance codes[25] - The company has adopted a code of conduct for securities trading by directors, confirming compliance with relevant standards[17] - The company has established appropriate internal control systems to comply with applicable laws and regulations[21] - The audit committee held four meetings during the fiscal year to review the group's annual, quarterly, and interim financial performance[28] - The audit committee's responsibilities include reviewing the independence of external auditors and discussing any issues arising from the year-end audit[29] - The company has implemented measures to ensure that one-third of the directors retire at each annual general meeting, maintaining governance standards[20] - The company established a Corporate Governance Committee, chaired by Mr. Chen Yiping, with members including Mr. Huang Chao and Mr. Zeng Shiqian[32] - The Corporate Governance Committee held one meeting during the reporting period to discuss governance policies and compliance[34] Financial Performance - The audited revenue for the fiscal year ending March 31, 2020, was approximately HKD 188.1 million, a decrease of about 25.3% compared to HKD 251.8 million in the previous fiscal year[123] - The net loss attributable to the owners of the company decreased to approximately HKD 23 million, a reduction of about HKD 52.9 million from the previous fiscal year[123] - The gross profit margin for the group's operations was approximately 62%, down from about 65% in the previous year, primarily due to rising food costs[141] - Other income increased by 45.5% to approximately HKD 5.5 million, up from HKD 3.8 million in the previous year, mainly due to government subsidies related to the impact of the COVID-19 pandemic[143] - Operating expenses decreased by approximately 29.8% to about HKD 128.7 million, down from HKD 183.2 million in the previous year, aligning with the reduction in revenue[144] Risk Management and Internal Controls - The board is committed to maintaining effective risk management and internal control systems to protect shareholder interests and group assets[55] - The company has engaged external consultants to review the effectiveness of its risk management and internal control systems during the reporting period[57] - The internal audit plan is reviewed annually and includes major activities and processes of the group, with findings reported to the audit committee and senior management[58] - The board believes that the risk management and internal control systems are effective and adequate, having conducted an annual review[58] Environmental and Social Responsibility - The company emphasizes the importance of corporate social responsibility as part of its business strategy, aiming for economic, social, and environmental sustainability[74] - The company recorded indirect greenhouse gas emissions from electricity consumption at 1,380,690 kg CO2 equivalent, and from gas consumption at 88,947 kg CO2 equivalent during the reporting period[91] - Total electricity consumption was 2,050,530 kWh, while water consumption reached 14,586 cubic meters, indicating a focus on resource efficiency[91] - The company emphasizes the importance of biodiversity and aims to source sustainable food ingredients, such as seafood from MSC-certified fisheries[90] - Waste management practices are in place to ensure that all waste is handled according to internal guidelines, with a focus on recycling and reducing waste generation[83] Employee Relations and Labor Practices - The workforce increased to 192 employees in Hong Kong, up from 174 in the previous year, while overseas employees decreased to 83 from 130[93] - The company emphasizes equal opportunity and diversity in its employment strategy, ensuring no restrictions on hiring based on gender or other discriminatory factors[95] - Health and safety in the workplace are a top priority, with compliance to occupational safety regulations and regular safety training for employees[101] - The company promotes work-life balance and provides resources to enhance employee well-being and stress relief[103] - The company offers training and development opportunities to employees, supporting their career advancement and satisfaction[105] Future Outlook and Strategic Initiatives - The company plans to thoroughly reposition the Italian Tomato brand despite current social unrest and the COVID-19 pandemic hindering development[130] - The company remains optimistic about the growth of the e-cigarette market in China due to its large population and global trends[166] - The company plans to explore new ingredients for e-cigarette production and establish new brands while participating in trade exhibitions and seeking external collaborations[166] - The company will continue to assess its business objectives and may revise plans based on market conditions[170] Shareholder Engagement and Dividends - The company allows shareholders holding at least 10% of the voting rights to request a special general meeting within two months of submission[62] - No dividends were recommended for the reporting period ending March 31, 2020[198] - The company has adopted a dividend policy allowing for the declaration and distribution of dividends based on profitability while retaining sufficient reserves for future growth[200] - The board retains absolute discretion to decide on any proposed dividends, considering various financial metrics and conditions[200]
荣晖控股(08213) - 2020 - 年度财报