Financial Performance - For the six months ended September 30, 2020, the company's revenue decreased by approximately 38.4% to HKD 194,272,000 from HKD 315,157,000 in the same period of 2019[10]. - Gross profit for the same period fell to HKD 34,525,000, while the gross margin slightly increased to 17.8% from 16.3% in the previous year[10]. - The company recorded a profit of HKD 572,000 for the period, down from HKD 1,151,000 in the prior year[13]. - Revenue for the six months ended September 30, 2020, was HKD 194,272,000, a decrease of 38.3% compared to HKD 315,157,000 in 2019[54]. - Gross profit for the same period was HKD 34,525,000, down 32.6% from HKD 51,324,000 in 2019[54]. - The net profit for the period was HKD 572,000, a decline of 50.3% compared to HKD 1,151,000 in the previous year[54]. - Basic earnings per share decreased to HKD 0.07 from HKD 0.14, representing a 50% drop[54]. - The operating profit for the six months ended September 30, 2020, was HKD 572,000, down from HKD 1,151,000 in the same period of 2019, indicating a decline of about 50.3%[93]. Assets and Liabilities - Total assets increased to HKD 428,815,000 as of September 30, 2020, compared to HKD 373,517,000 as of March 31, 2020[7]. - Cash and cash equivalents rose to HKD 67,725,000 from HKD 47,836,000 during the same period[7]. - The current liabilities exceeded current assets by HKD 26,227,000 as of September 30, 2020, compared to HKD 64,483,000 as of March 31, 2020[64]. - The total equity as of September 30, 2020, was HKD 57,077,000, slightly up from HKD 56,692,000 as of March 31, 2020[56]. - The group’s total financial liabilities amounted to HKD 368,109,000 as of September 30, 2020, compared to HKD 313,683,000 as of March 31, 2020, marking an increase of around 17.4%[122]. Cash Flow and Financing - The net cash used in operating activities for the six months ended September 30, 2020, was HKD (20,495,000), an improvement from HKD (61,184,000) in the same period of 2019[59]. - The company incurred a net cash outflow from investing activities of HKD (649,000) for the six months ended September 30, 2020, compared to HKD (20,605,000) in the previous year[59]. - New bank borrowings amounted to HKD 161,702,000 for the six months ended September 30, 2020, compared to HKD 393,989,000 for the same period in 2019, a decrease of 58.9%[114]. - The actual interest rate on bank borrowings ranged from 0.7% to 4.75% as of September 30, 2020, down from 1.1% to 5% as of March 31, 2020[114]. - The group has approximately HKD 196,325,000 in undrawn bank financing available as of the report's authorization date[66]. Cost Management - The company implemented a 30% salary reduction starting April 1, 2020, contributing to a decrease in operating costs by approximately HKD 11,800,000[12]. - Sales and distribution costs for the review period were approximately HKD 12,969,000, a reduction of about 24.2% compared to approximately HKD 17,112,000 in the same period last year[15]. - General and administrative expenses decreased by 23.3% to approximately HKD 25,424,000 from approximately HKD 33,128,000 in the same period last year[16]. - Financing costs decreased by approximately 16.9% to about HKD 4,077,000 from approximately HKD 4,907,000 in the same period last year, mainly due to a reduction in bank loan interest rates[17]. Impact of COVID-19 - The company faced significant disruptions due to COVID-19, impacting order volumes and operations in factories located in the Philippines and Sri Lanka[9]. - The group experienced a significant impact on operations due to COVID-19, with business in China suspended for approximately one week and operations in Sri Lanka halted from late March to early May 2020[65]. - The group received government subsidies of HKD 2,890,000 to support employee wages during the pandemic, which are recorded separately in the financial statements[69]. - The group recognized a reduction in lease liabilities totaling HKD 750,000 due to rent concessions received from landlords as a result of COVID-19[68]. - The group implemented cost control measures to enhance profitability and future cash flow, focusing on improving operational efficiency[66]. Employee and Shareholder Information - The group employed 1,782 full-time employees as of September 30, 2020, down from approximately 2,279 employees on March 31, 2020, indicating a reduction of about 22%[32]. - Major shareholders include Moonlight Global Holdings with a 37.5% stake and Rainbow Galaxy Limited with a 34.0% stake[45]. - The total remuneration for directors and key management personnel decreased to HKD 4,669,000 in 2020 from HKD 6,146,000 in 2019, representing a decline of approximately 23.9%[120]. Future Outlook - The group anticipates that the financial performance for the next six months will continue to reflect the lingering impacts of disruptions experienced in early 2020[23]. - The group expects sales from major customers to rebound in 2021 as the economy stabilizes and adapts to the new normal[23].

Financial Performance - Revenue for the year ended March 31, 2020, was HKD 590,873,000, a decrease of 7.9% from HKD 641,733,000 in 2019[7] - Gross profit increased to HKD 111,372,000, resulting in a gross margin of 18.8%, up from 14.5% in the previous year[7] - The company reported a loss before tax of HKD 59,471,000, compared to a loss of HKD 22,122,000 in 2019[7] - EBITDA for the year was reported at a loss of HKD 30,450,000, compared to a profit of HKD 1,942,000 in 2019[7] - The company recorded a loss of approximately HKD 58,638,000 for the year, compared to a loss of about HKD 22,670,000 in the previous year, primarily due to expected credit losses from a major customer[20] - The expected credit loss for trade and other receivables increased significantly from approximately HKD 515,000 to about HKD 53,067,000 year-over-year[22] Assets and Liabilities - Total assets decreased to HKD 372,730,000 from HKD 385,633,000 in the previous year[7] - Cash and bank balances fell to HKD 47,836,000, down from HKD 75,687,000 in 2019[7] - The company’s debt-to-equity ratio increased significantly to 323.9% from 99.3% in the previous year[7] - Total borrowings increased by approximately 21.5% to about HKD 231,439,000, up from HKD 190,443,000 in 2019, attributed to the acquisition of intellectual property and capital expenditures[32] - The asset-to-liability ratio as of March 31, 2020, was approximately 408.2%, significantly up from 164.8% in 2019, mainly due to increased expected credit losses and disruptions in cash flow[40] Operational Changes - The Sri Lanka factory expansion plan was put on hold due to the impact of COVID-19 on the supply chain[10] - The company experienced a significant reduction in workforce at the Panyu factory, with a decrease of about one-third to approximately 390 employees[9] - The Sri Lanka factory reduced its workforce by approximately 300 employees in May 2020 due to organizational restructuring[20] - The company has shifted most procurement functions to its Panyu facility, resulting in monthly salary savings of about HKD 1,000,000[20] - The company implemented a 30% salary reduction for all staff in the Hong Kong office starting April 1, 2020, in response to anticipated sales declines[20] Customer and Market Impact - The major customer, which accounted for 50% to 70% of total revenue, filed for Chapter 11 protection, with outstanding receivables totaling approximately USD 15,000,000 or HKD 120,000,000[20] - The group's sales volume for the year was approximately 2,750,600 garments, a decrease of about 28.2% from 3,830,000 garments in 2019, primarily due to a 40.3% drop in lower garment sales[25] - The average selling price of all clothing products increased to approximately HKD 214.5 per piece, compared to HKD 167.6 per piece in the previous year[25] Cost Management - Sales and distribution costs decreased by approximately 7.6% to about HKD 37,923,000, down from HKD 41,048,000 in 2019, consistent with the decline in sales revenue[26] - General and administrative expenses increased by approximately HKD 8,023,000 to about HKD 70,280,000, up from HKD 62,257,000 in the previous year, mainly due to higher personnel and other costs[29] - Financing costs rose by approximately 24.1% to about HKD 9,905,000, up from HKD 7,984,000 in 2019, primarily due to increased lease liabilities and borrowings[30] - The company has implemented cost-cutting measures expected to save over HKD 20,000,000 annually, including workforce reductions and salary cuts of up to 33.3%[36] Governance and Compliance - The company has adopted and complied with the corporate governance code as per the Hong Kong Stock Exchange's Main Board Listing Rules[71] - The board consists of seven members, including three executive directors, one non-executive director, and three independent non-executive directors[76] - The company has a strong focus on risk management and internal control systems, delegating daily operations to the CEO and senior management[82] - The Audit Committee consists of three independent non-executive directors, ensuring compliance with financial reporting standards and effective audit procedures[88] - The Remuneration Committee is responsible for determining the remuneration packages of all executive directors and senior management, ensuring transparency in the process[93] Shareholder Information - The company has no capital commitments or contingent liabilities as of March 31, 2020[46] - The maximum number of shares that may be issued upon the exercise of options under the share option scheme is 80,000,000 shares, representing 10% of the total issued shares as of the report date[159] - The stock option plan has a validity period of ten years from the date of adoption, with no stock options granted since its adoption[166] - The company has no arrangements that would allow directors to benefit from acquiring shares of the company or any other entity[174] - Major shareholders include Moonlight Global Holdings with 300,000,000 shares (37.5%) and Rainbow Galaxy Limited with 272,000,000 shares (34.0%) [181]

Financial Performance - The company's revenue decreased by approximately 11.9% from HKD 357,666,000 in the previous year to HKD 315,157,000 for the six months ended September 30, 2019[10]. - Gross profit fell by HKD 7,841,000, resulting in a gross margin of 16.3%, slightly down from 16.5% in the previous year[6]. - Net profit attributable to the company's owners was approximately HKD 1,151,000, down from HKD 3,118,000 in the same period last year[11]. - EBITDA increased to HKD 15,523,000 from HKD 14,630,000 year-on-year[11]. - Revenue for the six months ended September 30, 2019, was HKD 315,157,000, a decrease of 11.9% compared to HKD 357,666,000 for the same period in 2018[54]. - Gross profit for the same period was HKD 51,324,000, down 13.2% from HKD 59,165,000 in 2018[54]. - Net profit for the period was HKD 1,151,000, a decline of 63.1% compared to HKD 3,118,000 in the previous year[54]. - Basic earnings per share decreased to HKD 0.14 from HKD 0.52, representing a drop of 73.1%[54]. - Total comprehensive income for the period was HKD 721,000, down 78.1% from HKD 3,293,000 in 2018[54]. - The company did not recommend any interim dividend for the six months ended September 30, 2019[46]. Assets and Liabilities - Total assets rose to HKD 499,400,000, compared to HKD 385,633,000 in the previous year[8]. - Non-current assets increased to HKD 132,362,000 as of September 30, 2019, compared to HKD 99,549,000 as of March 31, 2019, representing a growth of 33%[56]. - Current assets rose to HKD 367,038,000 as of September 30, 2019, up from HKD 286,084,000 as of March 31, 2019, indicating an increase of 28%[56]. - Current liabilities increased to HKD 371,533,000 as of September 30, 2019, from HKD 268,016,000 as of March 31, 2019, reflecting a rise of 38.7%[56]. - The company's debt-to-equity ratio was 242.7% as of September 30, 2019, compared to 164.8% as of March 31, 2019[24]. - The group’s total financial liabilities rose to HKD 370,230,000 as of September 30, 2019, compared to HKD 267,748,000 as of March 31, 2019, indicating an increase of approximately 38%[135]. Cash Flow and Financing - As of September 30, 2019, cash and cash equivalents were approximately HKD 78,558,000, up from HKD 75,687,000 as of March 31, 2019[17]. - The net cash used in operating activities for the six months ended September 30, 2019, was HKD (61,184,000), an improvement from HKD (83,316,000) in the same period of 2018[61]. - The company reported a financing cost of HKD 4,907,000 for the period, compared to HKD 4,147,000 in the previous year[54]. - Financing costs increased by approximately 18.3% to about HKD 4,907,000 from HKD 4,147,000 due to rising interest rates and increased loan amounts[16]. - New bank borrowings amounted to HKD 393,989,000 for the six months ended September 30, 2019, a 30.6% increase from HKD 301,451,000 in the same period last year[124]. - The company repaid HKD 303,289,000 in bank borrowings during the same period, compared to HKD 239,953,000 in the previous year, reflecting a 26.5% increase in repayments[124]. Operational Insights - The company believes its operating performance will improve in the second half of the fiscal year ending March 31, 2020[19]. - The company is optimistic about diversifying its customer base due to trade shifts caused by the US-China trade tensions[20]. - The company plans to continue expanding its market presence in the United States, focusing on the manufacturing and trading of apparel products[64]. - The group expects to continue generating positive operating cash flow over the next twelve months[70]. - The board plans to enhance and implement measures to improve the group's working capital and cash flow, including close monitoring of administrative expenses and operating costs[70]. Corporate Governance and Compliance - The board confirms compliance with the corporate governance code as per the listing rules during the six months ending September 30, 2019[36]. - The audit committee has reviewed the interim financial information for the six months ending September 30, 2019, ensuring compliance with the relevant listing rules[37]. - The company has confirmed that all directors complied with the standard code of conduct for securities transactions during the reporting period[35]. Shareholder Information - Major shareholders include Moonlight Global Holdings Limited and Rainbow Galaxy Limited, holding 37.5% and 34.0% of shares respectively[40]. - The company has not engaged in any purchase, sale, or redemption of its listed securities during the six months ending September 30, 2019[34]. Inventory and Receivables - Inventory increased by approximately HKD 22,295,000 to about HKD 59,389,000, primarily due to a rise in raw materials[17]. - Trade and other receivables rose by approximately HKD 54,552,000 to about HKD 224,250,000, attributed to seasonal effects[17]. - Trade receivables rose to HKD 207,927,000 as of September 30, 2019, compared to HKD 153,684,000 as of March 31, 2019, marking an increase of 35.3%[120]. Strategic Acquisitions and Investments - The company acquired intellectual property for USD 1,400,000 and established a licensing agreement with a minimum annual royalty of USD 120,000[26]. - The group is actively seeking strategic acquisitions to capture new business opportunities and increase revenue and profit base[69]. Lease and Accounting Changes - The adoption of HKFRS 16 has significantly changed the accounting treatment of leases, with most leases recognized as right-of-use assets and lease liabilities on the balance sheet[73]. - The group has applied the cumulative effect method for HKFRS 16, adjusting the right-of-use assets to equal the lease liabilities recognized[74]. - The total lease liabilities as of September 30, 2019, amounted to HKD 18,624,000, with HKD 9,247,000 due within one year and HKD 9,377,000 due after one year[116].

Financial Performance - Revenue for the year ended March 31, 2019, was HKD 641,733,000, a decrease of 5.2% from HKD 676,856,000 in 2018[9] - Gross profit for 2019 was HKD 92,899,000, resulting in a gross margin of 14.5%, down from 18.4% in 2018[9] - The company recorded a net loss attributable to owners of HKD 22,670,000, compared to a profit of HKD 20,012,000 in the previous year[9] - EBITDA (after deducting listing expenses) was HKD 6,995,000, significantly lower than HKD 49,674,000 in 2018[9] - The total sales volume for the year was approximately 3,830,000 garments, a decrease from about 4,373,000 garments in the previous year, with a significant drop in lower garment sales by approximately 17.4%[20] - Average selling price per garment increased to approximately HKD 167.6 from HKD 154.8 in the previous year[20] - Financing costs increased by approximately 35.5% to about HKD 7,984,000, up from approximately HKD 5,892,000 in the previous year[23] - The interest coverage ratio decreased to (1.8 times) from 5.4 times in the previous year, indicating increased financial strain[9] Assets and Liabilities - The total assets increased to HKD 385,633,000 from HKD 364,490,000, while the equity attributable to owners rose to HKD 115,544,000 from HKD 68,534,000[9] - Cash and cash equivalents as of March 31, 2019, were approximately HKD 75,687,000, an increase from about HKD 66,536,000 in the previous year[25] - Borrowings decreased by approximately HKD 6,733,000 (about 3.4%) to approximately HKD 190,443,000 as of March 31, 2019[25] - The current assets and current liabilities were approximately HKD 286,084,000 and HKD 268,016,000 respectively, compared to HKD 255,946,000 and HKD 293,704,000 in the previous year[28] - The company's debt-to-equity ratio decreased to 164.8% as of March 31, 2019, down from 287.7% a year earlier, primarily due to the completion of a share placement in October 2018[30] Production and Operations - The company plans to relocate production lines to Sri Lanka and optimize operations in its Panyu factory to reduce costs and improve efficiency[11] - A significant expansion plan for the Sri Lanka factory is underway, including a feasibility study for doubling current capacity[11] - The company expects to maintain sales at last year's levels, with significant changes anticipated due to a large order of flight attendant uniforms, improving production planning and efficiency[27] Corporate Governance - The company has adopted and complied with the corporate governance code as per the Hong Kong Stock Exchange's Main Board Listing Rules since its listing date on October 19, 2018[62] - The board consists of seven members, including three executive directors, one non-executive director, and three independent non-executive directors[67] - The independent non-executive directors provide independent opinions on the company's strategy, policy formulation, accountability, and resource allocation[55] - The company has confirmed that all directors have complied with the relevant guidelines and codes regarding securities transactions[66] - The board is committed to engaging with shareholders through the annual general meeting, allowing them to express their opinions and ask questions[110] Management and Leadership - The company has been led by Ms. Wang Meihui, who has over 25 years of experience in the apparel industry and has been the CEO of Sterling Apparel since November 2012[43] - Mr. Xiao Yiming, appointed as an executive director in July 2017, is responsible for managing manufacturing facilities in Sri Lanka and China[44] - Mr. Zhong Guowei has served as the Chief Financial Officer since December 2013, overseeing the group's overall management and financial operations[46] - The company has a strong management team with over 20 years of experience in procurement and production management[57][58] Shareholder Information - The company did not recommend the declaration of a final dividend for the year ended March 31, 2019[19] - The board has adopted a dividend policy effective from January 1, 2019, aiming to maintain sufficient reserves for future development while providing returns to shareholders[113] - The board will consider various factors, including actual and expected financial performance, economic conditions, and operational strategies when deciding on dividend declarations[114] - The company has no predetermined dividend payout ratio, and the declaration and payment of dividends are at the board's discretion[115] Related Party Transactions - The rental agreements between SAL and Win 18, Win 19, and Win 20 have a monthly rent of HKD 125,000, excluding rates, land rent, and management fees[191][192][193] - The rental agreements were established based on independent property valuation and negotiated on fair and reasonable terms[195] - The independent non-executive directors confirmed that the related transactions were conducted in the overall interest of the company's shareholders[197][199] - Details of the related party transactions are included in the consolidated financial statements, specifically in note 35[200]