Financial Performance - For the year ended March 31, 2023, the Group's turnover was HK$683.5 million, a decrease of 13% compared to HK$781.2 million in 2022[18]. - The loss attributable to shareholders was HK$175.7 million, compared to a profit of HK$3.8 million in the previous year[18]. - The decline in turnover was primarily due to reduced revenue in the restaurant and food business, significantly impacted by COVID-19 lockdowns[18]. - The Group faced increased finance costs due to rising interest rates on bank borrowings[18]. - The Group's net assets decreased to HK$3.6 billion from HK$4.1 billion in the previous year[4]. - Total assets were reported at HK$6.5 billion, down from HK$7.1 billion in 2022[4]. - The Group's basic loss per share was HK$11.18, compared to earnings of HK$0.25 per share in the previous year[4]. Rental and Property Income - Rental income from the property segment increased by 2% during the year, attributed to the gradual normalization of tenancy business as COVID-19 restrictions were lifted[20]. - The Group recorded a 2% increase in rental income due to the normalization of leasing activities following the easing of COVID-19 restrictions[22]. - The Guangzhou South Station commercial property achieved 100% occupancy, contributing significantly to the Group's rental income[25]. - The property segment's turnover for the year ended March 31, 2023, was HK$109,021,000, representing a 4% increase from HK$105,026,000 in 2022[155]. - Rental income from investment properties for the year was HK$96,045,000, up 2% from HK$94,298,000 in the previous year[155]. - The segment loss for the year was HK$96,642,000, compared to a profit of HK$56,990,000 in the prior year, primarily due to a net loss on investment property valuation of approximately HK$60,138,000[155]. Business Segment Performance - The food and restaurant business segment experienced a 15% decrease in turnover, primarily due to disruptions from COVID-19, with segment profit down 82%[28]. - The food business turnover decreased by 23%, largely attributed to reduced mooncake sales, while the bakery business in Hong Kong saw an 8% increase[32]. - The overall restaurant turnover decreased by 5%, impacted by the closure of loss-making shops and a slower economic recovery in Hong Kong[33]. - The turnover of the restaurant, food, and hotel segment for the year ended 31 March 2023 was HK$574,461,000, a decrease of 15% from HK$676,144,000 in 2022[169]. - The segment profit for the year was HK$8,970,000, reflecting an 82% decrease from HK$51,070,000 in the previous year, primarily due to reduced mooncake sales[169]. - The food business turnover decreased by 23% to HK$283,257,000 from HK$368,361,000 in 2022, mainly due to the impact of COVID-19 lockdowns on mooncake sales[176]. - The bakery business in Hong Kong recorded an 8% increase in sales to HK$129,776,000 from the previous year[180]. - The restaurant business recorded a slight operating loss of HK$559,000 compared to a loss of HK$19,389,000 in the previous year, indicating a recovery trend[170]. - The hotel business recorded a turnover of HK$20,937,000, a decrease of 6% from HK$22,191,000 in 2022[186]. - The operating loss for the two hotels was HK$18,929,000, reduced by 22% from HK$24,234,000 in 2022[186]. - Both hotels achieved positive operating cash flows during the year, with increased room rent and occupancy following the lifting of COVID-19 restrictions[186]. Strategic Outlook and Development - Management remains cautiously optimistic about the economic outlook, despite uncertainties such as inflation and rising interest rates[34]. - The Group plans to focus on business development in the Greater Bay Area, leveraging established brands to expand its restaurant business[35]. - The Group's food business is expected to become a key driver of profitability and growth, with plans to introduce new products and expand production capacity[40]. - Effective cost control measures will be implemented to enhance competitiveness and sustain business growth in Hong Kong and Mainland China[41]. - The Group plans to expand its food business in the mainland market, with new products and elements being introduced[42]. - The advanced Hainan food factory's bread production line is now operational, with plans to produce Hainan-style packaged foods and Chinese meat products[42]. - The Group remains cautiously optimistic about the economic outlook for the coming year despite economic uncertainties such as inflation and rising interest rates[193]. - Management will focus on business development in the Greater Bay Area, leveraging established branding to expand restaurant operations[194]. - The Group plans to expand its food business in the Mainland market, introducing new products including packaged Hainan style food and Chinese style dry meat products[200]. Governance and Management - The Group's Executive Director, Ma Hung Man, has been responsible for the development of the food business since September 8, 2022, and has extensive management experience in the food and beverage sector[56]. - The Group's Chief Financial Officer, Chen Bingquan, has over 30 years of experience in accounting and financial management, having joined the Group in June 2019[55]. - The Group's restaurant and food production division has been led by Ma Hung Man since 2012, indicating a strong focus on this sector[58]. - The Group's independent non-executive director, Cheung Wah Fung, has over 40 years of experience in the financial market and securities industry, enhancing the Group's governance[62]. - The Group's independent non-executive director, Wong See King, has over 20 years of experience in corporate finance and building hardware, contributing to the Group's strategic insights[61]. - The Group's senior management includes Lee Chor Kwing, who has been managing the food division since 1993, indicating stability in leadership[66]. - Jiang Benhua, appointed as Managing Director of the restaurant group in 2016, has over 30 years of experience in restaurant operation and management, strengthening operational expertise[67]. - The Group has a strong focus on food business development, with key personnel having significant industry experience[56]. - The Group's leadership team includes members with extensive backgrounds in finance, engineering, and management, providing a diverse skill set for strategic decision-making[55][61][62]. - The Group's governance structure is supported by independent directors with substantial experience in finance and investment, ensuring effective oversight[59][62]. - The Board of Directors consists of nine members, including six executive directors and three independent non-executive directors[78]. - The Company has complied with the Corporate Governance Code throughout the accounting period covered by the report[72]. - The Board is responsible for the preparation of financial statements, adopting generally accepted accounting standards in Hong Kong[88]. - The Board has reviewed the financial projections and is not aware of any material uncertainties affecting the Group's ability to continue as a going concern[89]. - The Company held four regular board meetings during the year, with attendance recorded for each director[91]. - The Company has adopted the Model Code for Securities Transactions by Directors, confirming compliance throughout the year[74]. - The directors are subject to retirement by rotation at least once every three years at the annual general meeting[73]. - The Company emphasizes a quality board, sound internal control, transparency, and accountability to shareholders[72]. - The executive directors and senior management are delegated with respective levels of authority regarding corporate strategy and policy[83]. - The Company has a commitment to maintaining high standards of corporate governance as per the Listing Rules[72]. - The board of directors held regular meetings four times a year, with at least 14 days' notice provided to all directors[94]. - During the financial year ended March 31, 2023, all directors participated in training sessions and seminars, enhancing their expertise[100]. - The company has three independent non-executive directors, representing one-third of the board, ensuring a balance of power and independent judgment[106]. - The Audit Committee, established on April 1, 1999, consists of three independent non-executive directors, ensuring compliance with governance standards[111]. - The roles of Chairman and Chief Executive Officer are separated, with Mr. Ma Kai Yum as Chairman and Mr. Liang Rui as CEO for the year ended March 31, 2023[102]. - The company secretary assists in preparing meeting agendas and ensures compliance with applicable rules and regulations[95]. - Independent non-executive directors provide checks and balances to safeguard the interests of the group and its shareholders[105]. - The board committees are provided with sufficient resources to discharge their duties and can seek independent professional advice when necessary[107]. - Directors have full access to information on the group and can obtain independent professional advice whenever deemed necessary[95]. - The company ensures that newly-appointed directors receive orientation materials to understand their duties and responsibilities under the Listing Rules[96]. - The Audit Committee held two meetings during the year, with all members attending both sessions[116]. - The audit fee for Ernst & Young was HK$2,850,000 for 2023, unchanged from 2022, while non-audit service fees were HK$80,000, also unchanged[119]. - The total remuneration for senior management was categorized as follows: 3 individuals earned up to HK$1,000,000, 4 earned between HK$1,000,001 and HK$2,000,000, and 2 earned between HK$2,000,001 and HK$5,000,000[130]. - The Remuneration Committee held two meetings during the year, with full attendance from all members[126]. - The Nomination Committee held one meeting during the year, with all members present[135]. - The Audit Committee reviewed the Group's financial reporting process and internal controls, discussing the annual report for the year ended March 31, 2023[117]. - The total remuneration for directors and senior management is structured to attract and retain key executives, ensuring alignment with the Group's objectives[122]. - The Audit Committee expressed satisfaction with the audit service fee review, process, effectiveness, independence, and objectivity[123]. - The Remuneration Committee made recommendations on executive directors' remuneration packages and terms of employment during the year[128]. - The Nomination Committee aims to enhance the Board's composition by appointing individuals with relevant expertise and experience[134].
佳宁娜(00126) - 2023 - 年度财报