[Company Information](index=3&type=section&id=Company%20Information) This section provides an overview of the company's board structure, registration details, and stock information [Company Overview](index=3&type=section&id=Company%20Overview) The board of directors of Grandeur Holdings Limited comprises executive, non-executive, and independent non-executive directors, with audit, nomination, and remuneration committees - Board members include Mr. Liu Tsz Ching (Chairman), Ms. Wu Suk Kwan (CEO) as executive directors, Mr. Wong Chung Yeung as non-executive director, and Ms. Li On Lei, Mr. Ng Ki Man, Mr. Law Siu Kit as independent non-executive directors[2](index=2&type=chunk) - The company has an Audit Committee (Chairman: Mr. Ng Ki Man), a Nomination Committee (Chairman: Mr. Liu Tsz Ching), and a Remuneration Committee (Chairman: Ms. Li On Lei)[2](index=2&type=chunk) - The company's stock code is **1854**, and its website is www.cyfood.com.hk[2](index=2&type=chunk) [Chairman's Statement](index=4&type=section&id=Chairman's%20Statement) This section presents the Chairman's review of the company's performance, challenges, and strategic outlook for the year [Overview](index=4&type=section&id=Overview) This year, the company faced challenges from the COVID-19 pandemic and a difficult operating environment in the catering industry, leading to reduced food ingredient demand - The outbreak of COVID-19 and school closures in Hong Kong led to reduced demand for food ingredients from catering service operators[4](index=4&type=chunk) - The Group has implemented several measures to mitigate risks and impacts, including strengthening accounts receivable control, reviewing procurement processes, negotiating with suppliers, and integrating operational processes to reduce costs[4](index=4&type=chunk) [Annual Results](index=4&type=section&id=Annual%20Results) For the year ended March 31, 2020, the Group's total revenue was approximately HK$154.1 million, a decrease from the previous year, resulting in a net loss of approximately HK$4.7 million Annual Results Overview | Metric | Year Ended March 31, 2020 (HK$ million) | Year Ended March 31, 2019 (HK$ million) | | :--- | :--- | :--- | | Total Revenue | 154.1 | 185.9 | | Net Loss / Profit | (4.7) | 16.1 | - The decrease in revenue and net loss were primarily attributable to adverse catering industry conditions, school closures in Hong Kong, and reduced demand for food ingredients due to the COVID-19 pandemic[5](index=5&type=chunk) [Outlook](index=5&type=section&id=Outlook) The food service industry is expected to continue facing operational pressure, and the Group will monitor the market, adjust operations, and explore retail and OEM services to expand its offerings - The COVID-19 pandemic is expected to continue exerting operational pressure on the food service industry, where increased demand for processed food ingredients offers ancillary opportunities but is insufficient to offset losses[7](index=7&type=chunk) - The Group will explore the retail sector and Original Equipment Manufacturer (OEM) services to expand its service scope and product categories, maintaining market position and creating long-term value for shareholders[7](index=7&type=chunk) [Appreciation](index=5&type=section&id=Appreciation) The Chairman, on behalf of the Board, thanks all stakeholders for their support and contributions during a challenging economic environment - The Chairman expresses gratitude to shareholders, investors, business partners, directors, management, and staff for their support and contributions during a challenging economic environment[8](index=8&type=chunk) - The company remains committed to maintaining its leading position in the industry and creating maximum value for shareholders[8](index=8&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the Group's business operations, financial performance, and future outlook, including key financial metrics and risk factors [Business Review](index=6&type=section&id=Business%20Review) The Group primarily procures, processes, and supplies vegetables and fruits to over 480 catering service outlets in Hong Kong, reporting a net loss of HK$4.7 million this year - The Group supplies over **1,300 types of food ingredients** to more than **480 customer outlets**[9](index=9&type=chunk) Annual Results Comparison | Metric | Year Ended March 31, 2020 (HK$ million) | Year Ended March 31, 2019 (HK$ million) | | :--- | :--- | :--- | | Net Loss / Profit | (4.7) | 16.1 | - The loss was primarily attributable to decreased revenue and a lower gross profit margin[9](index=9&type=chunk) [Prospects](index=6&type=section&id=Prospects) The company's shares were transferred to the Main Board of the Stock Exchange on March 21, 2019, aiming to enhance its image and expand its investor base - The company's shares were transferred to the Main Board of the Stock Exchange on **March 21, 2019**, aiming to enhance its image, expand its investor base, and create long-term value[10](index=10&type=chunk) - Facing the COVID-19 pandemic and social-political tensions, the Group will closely monitor the market, explore new supply sources, fine-tune its product structure, and implement cost management measures[10](index=10&type=chunk) [Revenue](index=6&type=section&id=Revenue) For the year ended March 31, 2020, the Group's revenue was approximately HK$154.1 million, a year-on-year decrease of approximately 17.1%, mainly due to adverse catering industry conditions and school closures Revenue Comparison | Year | Revenue (HK$ million) | Year-on-Year Change | | :--- | :--- | :--- | | Ended March 31, 2020 | 154.1 | -17.1% | | Ended March 31, 2019 | 185.9 | - | - The decrease in revenue was primarily due to the adverse overall catering industry operating environment and school closures, leading to reduced demand for food ingredients from catering service operators[11](index=11&type=chunk) [Cost of Sales](index=6&type=section&id=Cost%20of%20Sales) For the year ended March 31, 2020, the cost of sales was approximately HK$134.9 million, a year-on-year decrease of approximately 5.0%, mainly due to reduced demand for food ingredients Cost of Sales Comparison | Year | Cost of Sales (HK$ million) | Year-on-Year Change | | :--- | :--- | :--- | | Ended March 31, 2020 | 134.9 | -5.0% | | Ended March 31, 2019 | 142.0 | - | - The decrease in cost of sales was primarily due to reduced demand for food ingredients from catering service operators, although raw material costs increased due to supply shortages in some regions[12](index=12&type=chunk) [Gross Profit and Gross Profit Margin](index=7&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) For the year ended March 31, 2020, gross profit significantly decreased by approximately 56.4% to HK$19.2 million, and the gross profit margin fell by 11.2 percentage points to 12.5% Gross Profit and Gross Profit Margin Comparison | Metric | Year Ended March 31, 2020 | Year Ended March 31, 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | HK$19.2 million | HK$44.0 million | -56.4% | | Gross Profit Margin | 12.5% | 23.7% | -11.2 percentage points | - The decline in gross profit and gross profit margin was primarily due to decreased revenue and increased raw material costs[14](index=14&type=chunk) [Selling and Administrative Expenses](index=7&type=section&id=Selling%20and%20Administrative%20Expenses) For the year ended March 31, 2020, selling and administrative expenses decreased by approximately 8.5% to HK$21.5 million, mainly due to a significant reduction in professional fees related to the board transfer Selling and Administrative Expenses Comparison | Year | Selling and Administrative Expenses (HK$ million) | Year-on-Year Change | | :--- | :--- | :--- | | Ended March 31, 2020 | 21.5 | -8.5% | | Ended March 31, 2019 | 23.5 | - | - The decrease in expenses was primarily due to a reduction in professional fees for the board transfer from approximately **HK$4.5 million** to approximately **HK$1.2 million**[15](index=15&type=chunk) [Finance Costs](index=7&type=section&id=Finance%20Costs) For the year ended March 31, 2020, finance costs increased by approximately 100.0% to HK$1.0 million, primarily due to an increase in the average bank borrowing balance Finance Costs Comparison | Year | Finance Costs (HK$ million) | Year-on-Year Change | | :--- | :--- | :--- | | Ended March 31, 2020 | 1.0 | +100.0% | | Ended March 31, 2019 | 0.5 | - | - The increase in finance costs was primarily due to an increase in the average bank borrowing balance[16](index=16&type=chunk) [Share of Loss of a Joint Venture](index=7&type=section&id=Share%20of%20Loss%20of%20a%20Joint%20Venture) For the year ended March 31, 2020, the Group recorded a share of loss of a joint venture of approximately HK$146,000, a significant increase from HK$2,000 in the prior year Share of Loss of Joint Venture Comparison | Year | Share of Loss of Joint Venture (HK$) | | :--- | :--- | | Ended March 31, 2020 | 146,000 | | Ended March 31, 2019 | 2,000 | [Loss / Profit Attributable to Owners of the Company](index=7&type=section&id=Loss%20%2F%20Profit%20Attributable%20to%20Owners%20of%20the%20Company) Due to the aforementioned factors, the loss attributable to owners of the company for the year ended March 31, 2020, was approximately HK$4.7 million, compared to a profit of approximately HK$16.1 million in the prior year Loss / Profit Attributable to Owners of the Company Comparison | Year | Loss / Profit Attributable (HK$ million) | | :--- | :--- | | Ended March 31, 2020 | (4.7) | | Ended March 31, 2019 | 16.1 | [Comparison of Business Objectives with Actual Business Progress](index=8&type=section&id=Comparison%20of%20Business%20Objectives%20with%20Actual%20Business%20Progress) The Group acquired five refrigerated and two non-refrigerated vans to expand its logistics team, but adverse business conditions delayed further acquisitions and staff recruitment, as well as sales channel improvements Comparison of Business Objectives with Actual Progress | Business Plan | Actual Business Progress | | :--- | :--- | | Acquire seven additional 5.5-tonne refrigerated vans and two 5.5-tonne non-refrigerated vans | Five refrigerated vans and two non-refrigerated vans acquired, further acquisition plans delayed | | Recruit eighteen additional distribution staff | Recruitment plan delayed | | Improve sales channels, such as maintaining and enhancing mobile sales applications and developing internet sales platforms | Time required for sales channel improvement exceeded expectations | - The overall adverse business environment was the primary reason for the delay in acquisition and recruitment plans[19](index=19&type=chunk) [Use of Net Proceeds from Listing](index=9&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) As of March 31, 2020, the Group had utilized approximately HK$46.2 million of net proceeds from the listing, primarily for a new processing base, human resources, and logistics expansion, with HK$1.6 million remaining unutilized Use of Net Proceeds from Listing (As of March 31, 2020) | Purpose | Planned Use (HK$ million) | Actual Use (HK$ million) | Unutilized Net Proceeds (HK$ million) | | :--- | :--- | :--- | :--- | | Acquisition of new processing base, facilities, and equipment | 23.7 | 23.7 | – | | Further enhancement of human resources | 9.1 | 9.1 | – | | Expansion of logistics team | 9.7 | 8.6 | 1.1 | | Improvement of sales channels | 0.5 | – | 0.5 | | General working capital | 4.8 | 4.8 | – | | **Total** | **47.8** | **46.2** | **1.6** | - The remaining **HK$1.6 million** of net proceeds is deposited in a licensed bank in Hong Kong, and the Directors will continue to assess and may adjust plans to adapt to market conditions[21](index=21&type=chunk) [Capital Structure](index=9&type=section&id=Capital%20Structure) The company's shares were transferred from GEM to the Main Board on March 21, 2019, and its capital structure, consisting solely of ordinary shares, has remained unchanged since the listing date, except for share repurchases - The company's shares were transferred from GEM to the Main Board of the Stock Exchange on **March 21, 2019**[22](index=22&type=chunk) - Except for share repurchases, there have been no changes in the Group's capital structure, which consists solely of ordinary shares, from the listing date to the date of this report[22](index=22&type=chunk) [Liquidity and Financial Resources](index=10&type=section&id=Liquidity%20and%20Financial%20Resources) The Group primarily funds its liquidity through operating cash and bank borrowings, with borrowings of approximately HK$48.5 million and cash and bank balances of approximately HK$32.8 million as of March 31, 2020 Liquidity and Financial Resources Comparison | Metric | March 31, 2020 (HK$ million) | March 31, 2019 (HK$ million) | | :--- | :--- | :--- | | Borrowings | 48.5 | 26.7 | | Bank Balances and Cash | 32.8 | 24.7 | | Bank Overdrafts | None | None | - Bank borrowings are primarily used for working capital requirements and the acquisition of existing properties[23](index=23&type=chunk) - The Directors consider the Group's financial position to be sound and sufficient to expand its core business and achieve its business objectives[23](index=23&type=chunk) [Gearing Ratio](index=10&type=section&id=Gearing%20Ratio) As of March 31, 2020, the Group's gearing ratio was approximately 47.8%, an increase from 24.2% in the prior year, primarily due to increased bank borrowings Gearing Ratio Comparison | Year | Gearing Ratio | | :--- | :--- | | March 31, 2020 | 47.8% | | March 31, 2019 | 24.2% | - The increase in the gearing ratio was due to an increase in bank borrowings[24](index=24&type=chunk) [Pledge of the Group's Assets](index=10&type=section&id=Pledge%20of%20the%20Group's%20Assets) As of March 31, 2020, the Group pledged leasehold land and buildings under right-of-use assets with a net book value of approximately HK$59.9 million for its bank facilities Asset Pledge Status | Metric | March 31, 2020 (HK$ million) | March 31, 2019 (HK$ million) | | :--- | :--- | :--- | | Net Book Value of Pledged Assets | 59.9 | 54.4 | - The pledged assets are leasehold land and buildings under right-of-use assets[25](index=25&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries and Affiliated Companies, and Future Plans for Material Investments or Capital Assets](index=10&type=section&id=Significant%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Affiliated%20Companies%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) For the year ended March 31, 2020, the company had no significant investments, material acquisitions or disposals of subsidiaries and affiliated companies, or other future plans for material investments or capital assets, other than those disclosed in the annual report and prospectus - There were no significant investments, material acquisitions, or disposals of subsidiaries and affiliated companies during the year[25](index=25&type=chunk) - As of March 31, 2020, there were no other significant investment or capital asset plans[25](index=25&type=chunk) [Foreign Exchange Risk](index=10&type=section&id=Foreign%20Exchange%20Risk) As a food ingredient supplier, the Group conducts most transactions in Hong Kong Dollars, and thus the Directors believe it faces no significant foreign exchange risk and has no hedging policy - The majority of the Group's transactions are settled in Hong Kong Dollars, and the Directors believe there is no significant foreign exchange risk[26](index=26&type=chunk) - The Group currently has no foreign exchange hedging policy in place[26](index=26&type=chunk) [Treasury Policy](index=11&type=section&id=Treasury%20Policy) The Directors will continue to follow a prudent policy in managing the Group's cash balances and maintaining strong liquidity to seize future growth opportunities - The Directors will follow a prudent policy in managing cash balances and maintaining strong liquidity[28](index=28&type=chunk) - The objective is to ensure the Group is well-positioned to capture future growth opportunities[28](index=28&type=chunk) [Contingent Liabilities](index=11&type=section&id=Contingent%20Liabilities) As of March 31, 2020, the Group had no significant contingent liabilities - As of March 31, 2020, the Group had no significant contingent liabilities[29](index=29&type=chunk) [Commitments](index=11&type=section&id=Commitments) The Group's contractual commitments primarily involve rent for processing facilities and parking spaces, with lease commitments of approximately HK$102,000 and no capital commitments as of March 31, 2020 Lease Commitments Comparison | Year | Lease Commitments (HK$) | | :--- | :--- | | March 31, 2020 | 102,000 | | March 31, 2019 | 872,000 | - Effective April 1, 2019, the Group recognized right-of-use assets for leases, except for short-term and low-value leases[30](index=30&type=chunk) - As of March 31, 2020, the Group had no capital commitments for the acquisition of property, plant, and equipment[30](index=30&type=chunk) [Segment Information](index=11&type=section&id=Segment%20Information) The Group operates a single business segment, which involves the procurement, processing, and supply of food ingredients to catering service operators in Hong Kong - The Group primarily operates a single business segment: providing food ingredient procurement, processing, and supply services to catering service operators in Hong Kong[30](index=30&type=chunk) [Final Dividend](index=11&type=section&id=Final%20Dividend) The Board of Directors does not recommend the payment of a final dividend for the year ended March 31, 2020 - The Board of Directors does not recommend the payment of a final dividend for the year ended March 31, 2020[31](index=31&type=chunk) [Information on Employees](index=11&type=section&id=Information%20on%20Employees) As of March 31, 2020, the Group had 77 employees based in Hong Kong, a decrease from the previous year, with total staff costs of approximately HK$21.9 million Employee Headcount and Costs Comparison | Metric | March 31, 2020 | March 31, 2019 | | :--- | :--- | :--- | | Employee Headcount | 77 | 98 | | Total Staff Costs (HK$ million) | 21.9 | 22.3 | - Employee remuneration includes salaries, allowances, and discretionary bonuses, with various training programs provided[31](index=31&type=chunk) [Key Risks and Uncertainties](index=12&type=section&id=Key%20Risks%20and%20Uncertainties) The Group faces credit and liquidity risks, with credit risk primarily from trade receivables where the top five customers account for 65.4% of the total, and liquidity risk managed by maintaining sufficient cash and bank facilities - The Group's credit risk primarily arises from trade receivables and bank deposits[32](index=32&type=chunk) - As of March 31, 2020, trade receivables from the **top five customers** accounted for **65.4%** (2019: 56.2%) of total trade receivables, indicating credit concentration risk[32](index=32&type=chunk) - Liquidity risk is managed by maintaining sufficient cash and bank facilities to meet daily operating and capital commitments[34](index=34&type=chunk) [Environmental Policies and Performance](index=13&type=section&id=Environmental%20Policies%20and%20Performance) The Group is committed to environmental protection, implementing green initiatives in resource use, energy saving, waste management, and carbon emission reduction, in compliance with Hong Kong environmental laws - The Group has implemented various green environmental measures, including reusing and recycling paper, replacing with LED lights, and switching off air conditioners and electrical appliances[36](index=36&type=chunk) - The operations for the year complied in all material respects with currently applicable local environmental laws and regulations in Hong Kong[36](index=36&type=chunk) [Compliance with Relevant Laws and Regulations](index=13&type=section&id=Compliance%20with%20Relevant%20Laws%20and%20Regulations) To the best of the Board's knowledge, the Group has complied with relevant laws and regulations significantly impacting its business and operations, with no material breaches or non-compliance for the year ended March 31, 2020 - The Group has complied with relevant laws and regulations that have a significant impact on its business and operations[37](index=37&type=chunk) - For the year ended March 31, 2020, the Group had no material breaches or non-compliance with applicable laws and regulations[37](index=37&type=chunk) [Relationships with Suppliers, Customers and Other Stakeholders](index=13&type=section&id=Relationships%20with%20Suppliers%2C%20Customers%20and%20Other%20Stakeholders) The Group is committed to maintaining good relationships with its suppliers, customers, and other stakeholders, with no significant or serious disputes occurring for the year ended March 31, 2020 - The Group understands the importance of maintaining good relationships with its suppliers, customers, and other stakeholders[38](index=38&type=chunk) - For the year ended March 31, 2020, the Group had no significant or serious disputes with its stakeholders[38](index=38&type=chunk) [Environmental, Social and Governance Report](index=14&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This section details the Group's environmental, social, and governance (ESG) performance for the year, adhering to the guidelines of Appendix 27 of the Listing Rules [Overview](index=14&type=section&id=Overview) This ESG report covers Grandeur Holdings Limited's environmental, social, and governance performance for the year ended March 31, 2020, in compliance with the Listing Rules - This ESG report covers the environmental and social subject areas for the year ended March 31, 2020[39](index=39&type=chunk) - The report content complies with the Environmental, Social and Governance Reporting Guide set out in Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[39](index=39&type=chunk) [Reporting Scope](index=14&type=section&id=Reporting%20Scope) This report aims to provide a balanced account of the Group's environmental and social performance, covering overall operations for the period from April 1, 2019, to March 31, 2020 - This report covers the Group's overall operations for the reporting period from **April 1, 2019, to March 31, 2020**[40](index=40&type=chunk) - The Board of Directors assumes full responsibility for the Group's ESG strategy and reporting, and is responsible for evaluating ESG-related risks and ensuring the effectiveness of risk management and internal control systems[40](index=40&type=chunk) [About the Group](index=14&type=section&id=About%20the%20Group) The Group operates in Hong Kong, primarily engaged in the procurement, processing, and supply of vegetables and fruits to over 480 customer outlets across the city - The Group operates in Hong Kong, primarily engaged in the procurement, processing, and supply of vegetables and fruits[41](index=41&type=chunk) - It serves over **480 customer outlets** across Hong Kong[41](index=41&type=chunk) [Strategy](index=14&type=section&id=Strategy) The Group is committed to corporate social responsibility, integrating environmental and social considerations into daily operations, and executing its ESG strategy through legal compliance, KPI disclosure, and risk monitoring - The Group's objectives are to protect the environment, provide a friendly working environment for employees, and contribute to local communities[42](index=42&type=chunk) - Environmental objectives include incorporating environmentally friendly measures into daily operations, reducing greenhouse gas emissions, efficiently utilizing energy and resources, and continuously improving waste management[43](index=43&type=chunk) - Social objectives include respecting employee rights, promoting equal opportunities, focusing on occupational safety and health, ethical business practices, and promoting community engagement[43](index=43&type=chunk) [Stakeholder Engagement](index=17&type=section&id=Stakeholder%20Engagement) Stakeholder engagement is a critical success factor for the Group's ESG strategy, involving communication with customers, suppliers, employees, and management through surveys and discussions to understand their views and continuously improve performance - Key stakeholders include customers, suppliers, employees, and management personnel[46](index=46&type=chunk) - The Group communicates with stakeholders through surveys and discussions to understand their opinions and provide effective responses[46](index=46&type=chunk) Stakeholder Expectations and Engagement Channels | Stakeholder | Expectations and Concerns | Engagement Channels | | :--- | :--- | :--- | | Customers | Quality of products and services | After-sales service, feedback channels | | Employees | Employee salaries and benefits, workplace health and safety, training and development | Training, performance reviews and interviews, internal announcements and publications, suggestion box | | Suppliers | Timely payment for goods supplied/services rendered | Site visits | | Shareholders | Corporate governance, return on investment | Annual General Meetings, annual and interim reports, press releases and announcements | | Community | Community engagement, environmental protection awareness | Community activities, subsidies, and charitable donations | [Materiality Assessment](index=18&type=section&id=Materiality%20Assessment) The Group has conducted a materiality assessment to identify key concerns and interests of internal and external stakeholders, covering social, operational, and environmental performance topics, presented in a materiality matrix - The Group has conducted a materiality assessment, aiming to identify the key concerns and interests of internal and external stakeholders[48](index=48&type=chunk) - The assessment results are presented in a materiality matrix, covering environmental, operational, and social-related topics[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [Environment](index=19&type=section&id=Environment) The Group is committed to developing its business in an environmentally protective manner, limiting negative impacts on ecosystems, and closely monitoring resource use, greenhouse gas and exhaust emissions, and waste management - The Group is committed to developing and managing its business in an environmentally protective manner, limiting negative impacts on ecosystems[53](index=53&type=chunk) [Resource Usage](index=19&type=section&id=Resource%20Usage) The Group closely monitors energy, water, and raw material consumption, implementing energy-saving measures and encouraging the use of recycled or recyclable packaging materials - The Group consumed a total of **825,390 kWh of electricity** during the reporting period, an increase from last year, mainly due to increased use of electronic equipment for food ingredient production and the addition of cold storage facilities[55](index=55&type=chunk) - The Group consumed **5,056 liters of petrol** and **46,580 liters of diesel**, with changes primarily due to re-designated delivery routes[56](index=56&type=chunk) - The Group consumed a total of **10,261 cubic meters of water** during the reporting period, an increase from last year, mainly due to the commencement of operations at the new Kwai Chung production plant[57](index=57&type=chunk) - The Group consumed a total of **24 tonnes of packaging materials** and encourages the use of recycled or recyclable materials[59](index=59&type=chunk) [Greenhouse Gas and Exhaust Emissions](index=21&type=section&id=Greenhouse%20Gas%20and%20Exhaust%20Emissions) The Group's greenhouse gas emissions primarily stem from fossil fuel and electricity consumption, with direct CO2e emissions of 142 tonnes and indirect emissions of 520 tonnes during the reporting period - The Group's operations directly emitted a total of **142 tonnes of CO2e greenhouse gases** from fuel consumption (2019: 158 tonnes)[61](index=61&type=chunk) - Greenhouse gas equivalent emissions from fugitive refrigerant emissions were approximately **133 tonnes of CO2e** (2019: 170 tonnes)[63](index=63&type=chunk) - Greenhouse gas equivalent emissions related to electricity consumption were **520 tonnes of CO2e** (2019: 467 tonnes)[64](index=64&type=chunk) - Indirect greenhouse gas emissions from waste paper disposed of in landfills were **5.8 tonnes of CO2e** (2019: 10.2 tonnes)[65](index=65&type=chunk) [Waste Management](index=22&type=section&id=Waste%20Management) The Group encourages environmentally friendly waste disposal, participates in official recycling programs for hazardous waste, and promotes waste reduction, reuse, and recycling for non-hazardous waste, generating 22 tonnes this year - The Group participates in official recycling programs for the safe disposal of hazardous waste, such as computers, discarded electrical appliances, and fluorescent lamps[68](index=68&type=chunk) - The Group promotes waste reduction at source, reuse, clean recycling, and recycling of non-hazardous waste, and donates vegetables and fruits to local food assistance organizations[69](index=69&type=chunk) Non-hazardous Waste Generation Comparison | Year | Total Non-hazardous Waste (tonnes) | | :--- | :--- | | 2019 to 2020 | 22 | | 2018 to 2019 | 30 | [Summary](index=24&type=section&id=Summary) This section summarizes the Group's key performance indicators for emissions and resource consumption during the reporting period, including consolidated data on energy consumption, greenhouse gas emissions, exhaust emissions, waste management, and resource usage Consolidated Environmental Key Performance Indicators | Category | Environmental KPI Unit | 2018 to 2019 | 2019 to 2020 | | :--- | :--- | :--- | :--- | | Total Energy Consumption | Gigajoules | 5,059 | 4,948 | | Total Greenhouse Gas Emissions | Tonnes of CO2e | 808 | 806 | | Nitrogen Oxides Emissions | Kilograms | 544.0 | 447.7 | | Total Non-hazardous Waste Generated | Tonnes | 30 | 22 | | Water Consumption | Cubic meters | 6,120 | 10,261 | | Total Packaging Materials | Tonnes | 24 | 24 | [Society](index=25&type=section&id=Society) The Group is committed to corporate social responsibility, fostering harmonious relationships with employees, customers, suppliers, and the community, covering employment, occupational health, training, supply chain management, product responsibility, anti-corruption, and community engagement - The Group is committed to fulfilling its social responsibilities and building harmonious relationships with employees, customers, suppliers, and the community[76](index=76&type=chunk) [Employment](index=25&type=section&id=Employment) The Group has comprehensive employment policies covering compensation, recruitment, promotion, working hours, holidays, equal opportunities, and diversity, aiming to attract and retain talent with competitive remuneration and benefits - The Group has formulated employment policies covering remuneration, dismissal, recruitment, promotion, working hours, holidays, equal opportunities, diversity, and anti-discrimination[77](index=77&type=chunk) - As of March 31, 2020, the Group employed a total of **77 staff members**, comprising **37 males (48%)** and **40 females (52%)**[78](index=78&type=chunk)[79](index=79&type=chunk) - The Group offers competitive remuneration, which is regularly reviewed to ensure alignment with the employment market, while complying with minimum wage and statutory social welfare regulations[80](index=80&type=chunk) [Equal Opportunity, Diversity and Anti-Discrimination](index=27&type=section&id=Equal%20Opportunity%2C%20Diversity%20and%20Anti-Discrimination) As an equal opportunity employer, the Group is committed to providing a fair workplace, with recruitment, compensation, promotion, and benefits based on objective assessments, and prohibits discrimination based on gender, disability, family status, and race - The Group is an equal opportunity employer, committed to providing a fair workplace for employees and adhering to principles of equality and anti-discrimination[83](index=83&type=chunk) - The Group complies with relevant Hong Kong laws and regulations, including the Sex Discrimination Ordinance, Disability Discrimination Ordinance, Family Status Discrimination Ordinance, and Race Discrimination Ordinance[83](index=83&type=chunk) [Occupational Health and Safety](index=27&type=section&id=Occupational%20Health%20and%20Safety) The Group is dedicated to maintaining a healthy and safe workplace for employees, implementing safety policies and procedures, regularly monitoring workplace conditions, and providing safety awareness education and training to prevent injuries and illnesses - The Group is committed to maintaining a healthy and safe workplace for employees and preventing workplace injuries and illnesses[84](index=84&type=chunk) - The Group maintains workplace safety and health by regularly monitoring cleanliness, pest control, safety, emergency supplies, and fire safety measures in processing plants, logistics centers, warehouses, and offices[84](index=84&type=chunk) - A Health, Safety and Environment Committee has been established, responsible for policy formulation, implementation, and review[84](index=84&type=chunk) [Employee Development and Training](index=28&type=section&id=Employee%20Development%20and%20Training) The Group is committed to providing adequate training for employees, including internal and external vocational training courses, to enhance their knowledge and skills, with 562 training hours recorded during the reporting period - The Group provides adequate training for employees, including induction for new staff, continuous education, and skill enhancement courses[85](index=85&type=chunk) - During the reporting period, the Group's employees received a total of **562 training hours**[86](index=86&type=chunk) Training Distribution | Category | Percentage (%) | | :--- | :--- | | By Gender: Male | 55.4 | | By Gender: Female | 44.6 | | By Seniority: Directors | 39.5 | | By Seniority: Senior Management | 1.2 | | By Seniority: Middle Management | 16.7 | | By Seniority: Employees | 42.6 | [Labor Standards](index=29&type=section&id=Labor%20Standards) The Group strictly prohibits child and forced labor, is committed to protecting human rights, and complies with all applicable Hong Kong labor laws and regulations to create a respectful and fair working environment - The Group prohibits child and forced labor and is committed to protecting human rights[87](index=87&type=chunk) - The Group complies with Hong Kong laws and regulations related to all applicable labor standards, including the Employment Ordinance[87](index=87&type=chunk) [Supply Chain Management and Product Quality Control](index=29&type=section&id=Supply%20Chain%20Management%20and%20Product%20Quality%20Control) The Group considers supply chain management a critical area, strictly managing environmental and social risks, requiring suppliers to meet quality, health, and safety standards, and ensuring the procurement of safe and healthy food ingredients

Financial Performance - Revenue for the six months ended September 30, 2019, was HKD 84,374,000, a decrease of 5.6% compared to HKD 89,869,000 for the same period in 2018[2] - Gross profit for the same period was HKD 11,719,000, down 39.2% from HKD 19,342,000 in 2018[2] - The company reported a net loss of HKD 1,239,000 for the six months ended September 30, 2019, compared to a profit of HKD 6,175,000 in the prior year[2] - Basic and diluted loss per share was HKD 0.10, compared to earnings of HKD 0.48 per share in 2018[2] - Miscellaneous income for the six months ended September 30, 2019, was HKD 94 million, down from HKD 354 million in 2018, indicating a decrease of approximately 73%[23] - The cost of goods sold for the six months ended September 30, 2019, was HKD 54,078 million, compared to HKD 52,533 million in 2018, reflecting an increase of approximately 2.9%[24] - Net financing costs for the six months ended September 30, 2019, amounted to HKD 320 million, up from HKD 206 million in 2018, representing an increase of approximately 55.3%[26] - For the six months ended September 30, 2019, the company reported a loss attributable to equity holders of HKD 1,233,000 compared to a profit of HKD 6,175,000 for the same period in 2018, representing a significant decline[29] - The basic and diluted loss per share for the period was HKD 0.10, down from a profit of HKD 0.48 per share in the previous year[29] Assets and Liabilities - Total assets as of September 30, 2019, were HKD 147,083,000, down from HKD 150,736,000 as of March 31, 2019[3] - Non-current assets amounted to HKD 84,320,000, slightly up from HKD 84,073,000 as of March 31, 2019[3] - Current assets decreased to HKD 62,763,000 from HKD 66,663,000 in the previous period[3] - Total equity attributable to the company's equity holders was HKD 109,828,000, down from HKD 111,061,000 as of March 31, 2019[4] - As of September 30, 2019, total trade receivables amounted to HKD 33,073,000, a decrease from HKD 37,788,000 as of March 31, 2019[37] - The company’s total borrowings as of September 30, 2019, were HKD 25,759,000, slightly down from HKD 26,650,000 as of March 31, 2019[39] - The net book value of property, plant, and equipment as of September 30, 2019, was HKD 81,281,000, down from HKD 83,181,000 as of March 31, 2019[33] - The company’s total liabilities included employee costs accrued of HKD 3,007,000 as of September 30, 2019[41] Cash Flow - Operating cash flow for the six months ended September 30, 2019, was HKD 3,138,000, compared to HKD 15,810,000 in 2018, representing a decrease of 80.2%[6] - Net cash from operating activities decreased to HKD 1,717,000 from HKD 14,714,000, a decline of 88.3% year-over-year[6] - Net cash used in investing activities was HKD 2,164,000, compared to HKD 9,016,000 in the previous year, indicating a reduction of 76.0%[6] - Cash and cash equivalents decreased by HKD 1,338,000 during the period, with ending cash and cash equivalents at HKD 23,364,000, up from HKD 21,392,000 in 2018[6] - The company’s total cash and cash equivalents at the beginning of the period were HKD 24,702,000, compared to HKD 16,133,000 in 2018, reflecting an increase of 53.2%[6] - The company’s financing cash flow showed a net outflow of HKD 891,000, compared to a net inflow of HKD 439,000 in the previous year, indicating a shift in financing activities[6] - The company’s total cash outflow from financing activities increased to HKD 891,000 from HKD 439,000, indicating a significant change in financing strategy[6] Corporate Governance - The company has adopted sound corporate governance practices emphasizing a strong board, effective internal controls, and transparency to stakeholders[83] - The company is committed to achieving and maintaining high levels of corporate governance, which is crucial for gaining and retaining the trust of shareholders and stakeholders[85] - The board believes that effective corporate governance practices are essential for accountability and transparency, contributing to the group's ongoing success and enhancing shareholder value[85] - The company has adhered to the principles and code provisions of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules throughout the period[85] - The company complies with Listing Rule 3.21, ensuring that the audit committee consists of at least three members, with the chairman being an independent non-executive director[85] Future Plans and Strategies - The company plans to focus on improving operational efficiency and exploring new market opportunities moving forward[2] - The company is in discussions with existing and potential new customers, including large-scale operating groups, to expand its supply range and support new store developments[51] - The company has successfully developed new sources for vegetable and fruit supply, and the operation of the Kwai Chung factory is expected to maintain market competitiveness[51] - The company plans to expand its logistics team by acquiring additional vehicles and hiring more distribution staff, although these plans have faced delays due to labor shortages[58] - The company aims to improve its sales channels, including upgrading mobile sales applications and developing an internet sales platform, although these modifications are taking longer than expected[58] Shareholder Information - The major shareholder, Classic Line, holds 720,000,000 shares, equivalent to 56.25% of the total equity[78] - As of September 30, 2019, Mr. Liao and Ms. Hu each hold a beneficial interest in 720,000,000 shares, representing 56.25% of the total equity[76] - The company repurchased 20,000,000 shares at an average price of HKD 0.24 per share, totaling approximately HKD 4.8 million, which is about 1.56% of the issued share capital[79] - The company's issued share capital decreased from 1,280,000,000 shares to 1,260,000,000 shares following the share repurchase[79] - The board did not recommend the payment of an interim dividend for the six months ended September 30, 2019[73] Accounting Standards - The company has adopted new accounting standards, including HKFRS 16, which may impact the classification of lease liabilities and assets[10] - The company is evaluating the impact of new accounting standards that will come into effect in future periods, which may affect financial reporting[9] - The group has chosen not to apply certain provisions of HKFRS 16 regarding the recognition of lease liabilities and right-of-use assets for leases that end within 12 months of the initial application date[14]

Financial Performance - Total revenue for the year ended March 31, 2019, was approximately HKD 185.9 million, an increase from HKD 176.8 million for the previous year[7]. - Net profit for the year ended March 31, 2019, was approximately HKD 16.1 million, down from HKD 22.9 million in the previous year, primarily due to professional fees related to the transfer listing of about HKD 4.5 million[11]. - Adjusted net profit for the year ended March 31, 2019, was approximately HKD 20.6 million, representing a decrease of about 10.0% compared to the previous year's adjusted net profit[11]. - The group's revenue for the year ended March 31, 2019, was approximately HKD 185.9 million, an increase of about 5.1% from HKD 176.8 million for the year ended March 31, 2018[13]. - The profit attributable to equity holders for the year ended March 31, 2019, was approximately HKD 16.1 million, a decrease of about 29.7% from HKD 22.9 million for the year ended March 31, 2018[20]. - Gross profit for the year ended March 31, 2019, was approximately HKD 44.0 million, a decrease of about 1.3% from HKD 44.6 million for the year ended March 31, 2018, with a gross margin of approximately 23.7%, down 1.5 percentage points from 25.2%[16]. - Profit before tax was HKD 20,353,000, down 26.1% from HKD 27,523,000 in the previous year[192]. - Total assets increased to HKD 150,736,000, up 15.4% from HKD 130,688,000 in 2018[192]. - Total liabilities were HKD 39,675,000, an increase of 11.3% from HKD 35,653,000 in 2018[192]. Operational Developments - The company successfully completed renovations and equipment installation at the Kwai Chung factory, which commenced full operations in January 2019, aimed at improving food processing efficiency[8]. - The group acquired a new processing base in Kwai Chung, which commenced full operations in January 2019, and has purchased additional facilities and machinery[21]. - The company anticipates continued operational pressures in the catering service industry, leading to increased demand for outsourced processing services[8]. - The company is in discussions with existing and potential clients, including large operating groups, to expand its current supply range and support new store openings[12]. - The company aims to further penetrate the market and expand its product offerings, particularly in processed fruit categories, to strengthen its position in the food service industry[8]. Cost and Expenses - The cost of sales for the year ended March 31, 2019, was approximately HKD 142.0 million, up about 7.3% from HKD 132.3 million for the year ended March 31, 2018[14]. - The selling and administrative expenses for the year ended March 31, 2019, were approximately HKD 23.6 million, an increase of about 38.0% from HKD 17.1 million for the year ended March 31, 2018[17]. - Employee costs totaled approximately HKD 22.3 million for the year ended March 31, 2019, up from HKD 18.5 million for the year ended March 31, 2018[36]. - The financing costs increased by approximately 22.3% to about HKD 526,000 for the year ended March 31, 2019, from HKD 430,000 for the year ended March 31, 2018[18]. Environmental and Social Responsibility - The company aims to reduce greenhouse gas emissions and improve waste management as part of its environmental goals[49]. - The company has implemented policies to monitor and control resource usage, including energy and water[55]. - The company promotes community engagement and ethical business practices as part of its social objectives[49]. - The company encourages the use of energy-efficient appliances and clean energy sources in its operations[56]. - The company has established a system for measuring and reporting its environmental and social performance through KPIs[50]. - The company is committed to protecting the environment and minimizing negative impacts on ecosystems[53]. - The company generated 30 tons of non-hazardous waste during the reporting period, of which approximately 7 tons were recycled[71]. - Total greenhouse gas emissions amounted to 436 tons of CO2 equivalent, a decrease from 808 tons in the previous year, representing a reduction of approximately 46%[74]. Corporate Governance - The board is committed to maintaining high standards of corporate governance to create long-term value for shareholders[112]. - The company has adopted sound corporate governance practices, emphasizing an excellent board, effective internal controls, and transparency[113]. - The board consists of a chairman, an executive director, and independent non-executive directors, ensuring a balance of experience and skills[117]. - The independent non-executive directors have confirmed their independence and possess relevant qualifications and experience[119]. - The company has established three board committees: remuneration, nomination, and audit, each with clear written terms of reference[126]. - The audit committee reviewed the consolidated financial statements for the year ending March 31, 2019, and confirmed compliance with applicable accounting standards and listing rules[135]. - The company has adopted a shareholder communication policy to ensure timely and equal access to information for shareholders and potential investors[150]. Risk Management - The group faces various risks and uncertainties, which are discussed in the management discussion and analysis section[156]. - The group has identified and assessed major risks that could impact the achievement of its objectives[146]. - The group maintained an effective internal control and risk management system to safeguard shareholder investments and group assets[146]. Shareholder Information - The board did not recommend a final dividend for the year ended March 31, 2019[35]. - The company has a dividend policy that considers financial performance, shareholder interests, and future capital needs before proposing any dividends[139]. - The company maintains discretion over its dividend policy and is not legally bound to declare any specific amount[141]. - The group made charitable donations of approximately HKD 2,000 for the year ended March 31, 2019, significantly down from HKD 24,000 in the previous year[160].