环科国际(00657) - 2025 - 年度财报

Corporate Information This section provides essential administrative and contact information, including board members, principal bankers, auditors, legal advisors, registered office, principal place of business, share registrar, company website, and stock code - Board members include Executive Directors Cheng Pak Man (Chairman), Cheng Pak Lai (Managing Director), Cheng Pak Ming, and Independent Non-Executive Directors Hung Chi Yuen, Yuen Siu Cheung, Lo Kwok Tai[5][6] - The company's auditor is BDO Limited (Hong Kong)[5][6] - The company's stock code is 00657[10] Chairman's Statement The Chairman's Statement reports a slight 1.4% consolidated revenue growth and narrowed net loss for FY2025, with Tsim Sha Tsui branch revenue growing double-digits post-renovation, while Kwun Tong branch revenue significantly declined due to cross-border consumption and economic pressures; the Board recommends no final dividend, anticipating a challenging operating environment and focusing on cautious expansion in mid-sized restaurants and diversified investment opportunities 2025 Fiscal Year Key Financial Data (Chairman's Statement) | Indicator | 2025 (Million HKD) | 2024 (Million HKD) | Change (Million HKD) | YoY Change (%) | | :--- | :----------------- | :----------------- | :--------------- | :----------- | | Consolidated Revenue | 50.2 | 49.5 | +0.7 | +1.4% | | Net Loss | (5.4) | (6.2) | +0.8 (Loss narrowed) | -12.9% | | Loss per Share | (0.28) HK cents | (0.32) HK cents | +0.04 (Loss narrowed) | -12.5% | - The Board has resolved not to recommend any final dividend for the year ended March 31, 2025 (2024: nil)[13][17] - The Tsim Sha Tsui branch, after renovation completion in early April 2024, showed continuous revenue improvement with double-digit growth, primarily due to new decor attracting more business and private events, 40th-anniversary promotions, and increased Southeast Asian tourists[14][19] - Kwun Tong branch revenue significantly declined, mainly due to increased preference for Hong Kong residents to cross the border for shopping and dining in mainland China, coupled with economic pressures and rising interest rates leading to cautious consumer spending[21][24] - The Group anticipates an extremely difficult operating environment in the coming year, with a strategy to focus on opening or operating mid-sized restaurants, adopting a more cautious approach to expansion and capital investment, and seeking new investment opportunities in Hong Kong, mainland China, and Australia to diversify revenue sources[22][25][26] Management Discussion and Analysis This section details the Group's financial performance, attributing the narrowed net loss to increased revenue, reduced staff costs, and higher interest income; strong Tsim Sha Tsui performance was offset by a significant decline in Kwun Tong revenue, while the Group maintains ample liquidity with no bank loans and reiterates its cautious business development and diversified investment strategy 2025 Fiscal Year Financial Review (Management Discussion and Analysis) | Indicator | 2025 (Million HKD) | 2024 (Million HKD) | Change (Million HKD) | YoY Change (%) | | :--- | :----------------- | :----------------- | :--------------- | :----------- | | Consolidated Revenue | 50.2 | 49.5 | +0.7 | +1.4% | | Net Loss | (5.4) | (6.2) | +0.8 (Loss narrowed) | -12.9% | | Gross Profit | Maintained last year's level | Maintained last year's level | - | - | | Other Income and Losses | 1.8 | 1.4 | +0.4 | +28.6% | | Staff Costs | 23.1 | 23.4 | (0.3) | -1.3% | | Depreciation | 0.4 | 0.2 | +0.2 | +100.0% | - The reduction in net loss was primarily due to increased revenue, decreased staff costs, and higher interest income[29][34] - Gross profit remained at last year's level, as increased food costs of approximately 4% and a 0.7% decline in gross profit margin offset the impact of higher revenue[30][35] - Other income and losses increased by approximately HKD 0.4 million, mainly driven by a HKD 1 million increase in interest income and a HKD 0.5 million increase in imputed interest income from a director's loan, but with no COVID-19 related rental concessions (2024: approximately HKD 1.1 million)[31][36] - Following the completion of renovation works at Tsim Sha Tsui Chiu Chow City Restaurant in early April 2024, revenue increased by approximately 13% year-on-year, but this was fully offset by a year-on-year revenue decrease of approximately 14% at the Kwun Tong restaurant[46][48] - Kwun Tong branch revenue significantly declined, mainly due to increased preference for Hong Kong residents to cross the border for shopping and dining in mainland China, coupled with economic pressures and rising interest rates leading to cautious consumer spending[46][48] - As of March 31, 2025, the Group's bank and cash balances were approximately HKD 21 million, with no bank loans, a zero debt-to-equity ratio, and sufficient working capital[50][55][56] - The Group's primary sales, purchases, and cash balances are denominated in HKD, with foreign exchange risk mainly arising from AUD-denominated bank deposits and a director's loan; management will closely monitor and consider hedging[52][58] - The Group's business model and strategy aim to create positive returns for shareholders through sustainable development and seek growth by offering innovative products/services, strict cost control, and business diversification, including exploring new investment opportunities in Hong Kong, mainland China, and Australia[62][65][66] Corporate Governance Report This report outlines the Group's corporate governance practices, including compliance with Listing Rules and addressing minor deviations like the resolved separation of Chairman and CEO roles; it details the Board's composition, responsibilities, and the operations of its Remuneration, Nomination, and Audit Committees, emphasizing risk management, internal controls, and shareholder communication Corporate Governance Code The company adopted the Corporate Governance Code in Appendix C1 Part 2 of the Listing Rules, complying with its provisions for FY2025, except for C.2.1 (separation of Chairman and CEO roles, now resolved) and C.3.3 (directors' appointment letters, addressed by reference to guidelines) - The Company has adopted the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules[71] - For the year ended March 31, 2025, the Company has complied with the code provisions of the Corporate Governance Code, except for code provision C.2.1 (roles of Chairman and Chief Executive to be separate) and C.3.3 (directors' appointment letters)[69][71] - The deviation from code provision C.2.1 was resolved following Mr. Cheng Hop Fai's retirement as Chairman of the Board on August 16, 2024, and Ms. Cheng Pak Man's appointment as Chairman of the Board and Ms. Cheng Pak Lai's appointment as Managing Director[69][72][110][112] - For directors without formal appointment letters, the Company requires them to perform their duties by referring to guidelines such as the "Guidelines on Directors' Duties" and "A Guide for Directors" to meet the objective of code provision C.3.3[73][76] Directors' Securities Transactions The company adopted the Model Code in Appendix C3 of the Listing Rules for directors' securities transactions, and all directors confirmed compliance for the year ended March 31, 2025 - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its own code of conduct regarding directors' securities transactions[74][77] - All Directors confirmed that they have complied with the required standards set out in the Model Code for the year ended March 31, 2025[74][77] Board of Directors The Board comprises three Executive and three Independent Non-Executive Directors, ensuring diverse expertise and compliance with Listing Rules; members retire by rotation and are eligible for re-election, with detailed meeting minutes and opportunities for INEDs to meet the Chairman privately, confirming effective mechanisms for independent input - The Board currently comprises three Executive Directors and three Independent Non-Executive Directors, complying with Listing Rules 3.10(1), 3.10(2), and 3.10A[75][78][85][87] - Board members possess core competencies in accounting and finance, business management, industry knowledge, and marketing strategies, ensuring Board diversity[84][86] - All Directors are required to retire by rotation at least once every three years and are eligible for re-election[80][81][97] 2025 Fiscal Year Board and General Meeting Attendance | Director Name | Board Attendance | General Meeting Attendance | | :--- | :--- | :--- | | Cheng Hop Fai (retired on August 16, 2024) | 1/6 | 1/1 | | Cheng Pak Ming | 3/6 | 1/1 | | Cheng Pak Man | 3/6 | 1/1 | | Cheng Pak Lai | 3/6 | 1/1 | | Lo To Ming (retired on August 16, 2024) | 3/6 | 0/1 | | Hung Chi Yuen | 6/6 | 1/1 | | Yuen Siu Cheung | 6/6 | 1/1 | | Lo Kwok Tai (appointed on June 19, 2024) | 4/6 | 1/1 | - The Chairman of the Board meets with the Independent Non-Executive Directors at least once a year to discuss any issues and concerns, without the presence of other Directors[94] Financial Reporting Directors confirm responsibility for preparing financial statements that truly and fairly reflect the Group's financial position, ensuring compliance with accounting standards and statutory rules, and the Board is unaware of any material uncertainties that could significantly question the company's going concern ability - Directors confirm their responsibility for preparing the Group's financial statements, which truly and fairly reflect the Group's financial position, and ensuring compliance with applicable accounting standards, statutory rules, and guidelines[98][100] - The Board is not aware of any material uncertainties that could cast significant doubt upon the Company's ability to continue as a going concern[98][100] Risk Management and Internal Controls The Board is responsible for establishing, maintaining, and reviewing risk management and internal control systems to provide reasonable assurance of financial and operational information reliability, operational effectiveness, and asset safeguarding; the Group's internal audit function regularly reviews key control areas and reports to the Audit Committee, ensuring independent, effective, and adequately resourced systems - The Board acknowledges its overall responsibility for establishing, maintaining, and reviewing the risk management and internal control systems to provide reasonable assurance regarding the reliability and integrity of financial and operational information, effectiveness and efficiency of operations, safeguarding of assets, and compliance with laws and regulations[99][101] - The Group's risk management and internal control systems are based on an internal control manual and governed by principles such as organization, segregation of duties, physical controls, authorization and approval, computation and accounting, personnel, supervision, and management[102][108] - The Group maintains an internal audit function responsible for reviewing key operational and financial controls, risk management, and internal control systems, reporting directly to the Chairman of the Audit Committee[109][111] - The Audit Committee is satisfied that the internal audit function is independent, effective, staffed with appropriately qualified and experienced personnel, adequately resourced, and holds an appropriate standing to fulfill its responsibilities[109][111](index=11