Financial Performance - The group's revenue decreased by 18% to HKD 232 million for the year ended March 31, 2020, compared to HKD 283 million in 2019, with a loss attributable to equity holders of HKD 23 million, down from a profit of HKD 1 million in 2019[12]. - Total revenue for the year ended March 31, 2020, was HKD 232,235,000, a decrease of 17.9% from HKD 283,113,000 in 2019[156]. - Gross profit for the same period was HKD 40,363,000, down 11.1% from HKD 45,620,000 in 2019[156]. - The company reported a loss before tax of HKD 22,793,000 compared to a profit of HKD 1,128,000 in the previous year[156]. - The net loss attributable to equity holders for the year was HKD 23,034,000, a significant decline from a profit of HKD 1,041,000 in 2019[156]. - Basic and diluted loss per share was HKD 1.85, compared to earnings of HKD 0.08 per share in the previous year[156]. - The fair value loss on investment properties was HKD 11,117,000, contrasting with a gain of HKD 7,620,000 in 2019[156]. - Administrative and other operating expenses were HKD 41,617,000, slightly down from HKD 42,163,000 in the previous year[156]. - Financing costs decreased to HKD 2,428,000 from HKD 2,578,000 in 2019[156]. - The company experienced a foreign exchange loss of HKD 767,000 from overseas operations, compared to a loss of HKD 214,000 in the previous year[156]. - Other comprehensive income for the year was HKD 4,124,000, compared to an expense of HKD 214,000 in 2019[156]. Revenue Breakdown - Sales of mobile phones decreased from HKD 227 million to HKD 182 million, while the segment recorded a profit of HKD 4 million, an increase from HKD 2 million in 2019[13]. - Revenue from IoT solutions decreased by 10% to HKD 46 million, with losses increasing from HKD 10 million to HKD 16 million[14]. - Rental income from property investment decreased from HKD 4.5 million to HKD 4.2 million, resulting in a loss of HKD 20,000, down from a profit of HKD 1.5 million in 2019[15]. - Revenue from smart system construction services recognized during the year was approximately HKD 18,089,000[141]. Cash Flow and Liquidity - The group maintains a healthy cash flow with cash and bank balances of approximately HKD 19 million as of March 31, 2020, down from HKD 29 million in 2019, and bank borrowings of HKD 65 million, down from HKD 71 million[19]. - Cash and cash equivalents decreased from HKD 26,310,000 in 2019 to HKD 17,350,000 in 2020, a reduction of approximately 34.1%[166]. - The company’s total equity fell from HKD 295,977,000 in 2019 to HKD 274,576,000 in 2020, a decline of about 7.2%[159]. - Net current assets dropped significantly from HKD 21,056,000 in 2019 to HKD 7,601,000 in 2020, representing a decrease of about 63.8%[158]. Corporate Governance - The board believes that good corporate governance is crucial for protecting the interests of shareholders, customers, and employees, and has complied with the corporate governance code except for certain provisions[30]. - The company has adopted the standard code of conduct for securities transactions by directors and confirmed compliance for the fiscal year ending March 31, 2020[32]. - The company is committed to reviewing and improving its corporate governance practices to ensure proper oversight of business activities and decision-making processes[30]. - The company has complied with the standards set out in the Listing Rules regarding securities trading by directors throughout the fiscal year ending March 31, 2020[46]. - The board is committed to continuously reviewing and improving corporate governance practices to safeguard the interests of shareholders and stakeholders[49]. - The company has committed to maintaining high standards of corporate governance[127]. Employee and Operational Metrics - The group employed approximately 100 staff as of March 31, 2020, down from 120 in 2019, with total employee compensation of HKD 27 million, down from HKD 31 million[23]. - The employee turnover rate was 2% for the reporting period, down from 3% in the previous year[80]. - The average training provided to each employee was 5 hours during the reporting period[82]. Environmental and Social Responsibility - The total electricity consumption for 2020 was 214,570 kWh, a decrease from 251,325 kWh in 2019[76]. - The total water consumption for 2020 was 132 cubic meters, down from 218 cubic meters in 2019[76]. - The company received an award for excellence at the Hong Kong Environmental Excellence Awards 2019[75]. - The company has a strict policy against child labor and forced labor, ensuring compliance with relevant guidelines and regulations[85]. - The company has been recognized as a "Family-Friendly Employer" since 2011, highlighting its commitment to family-friendly policies[95]. - The company has been a corporate sponsor of the "30-Hour Famine" event organized by World Vision Hong Kong since 2010[95]. Shareholder Information - The company does not recommend the distribution of dividends for the year ended March 31, 2020, compared to a dividend of HKD 0.002 per share totaling HKD 2.491 million in 2019[28]. - The company did not recommend any dividend payment for the year ended March 31, 2020, compared to a dividend of HK$0.002 per share in 2019[101]. - The chairman and CEO, Chen Chong-yi, holds a beneficial interest of 653,104,159 shares, representing 52.44% of the company[118]. - Chen Chong-yi also controls an additional 22,012,087 shares, accounting for 1.77% of the company[118]. - Chen Chung-yan holds a beneficial interest of 93,795,191 shares, which is 7.53% of the company[118]. - Liu Wenting holds 675,116,246 shares, representing 54.21% of the company, as a spouse's interest[122]. - Liu Huixian owns 93,795,191 shares, which is 7.53% of the company, also as a spouse's interest[122]. Audit and Compliance - The audit committee reviewed the unaudited interim financial statements for the six months ending September 30, 2019, and the audited financial statements for the year ending March 31, 2020[33]. - The auditor's fees for the year ending March 31, 2020, totaled HKD 723,000, with HKD 683,000 for audit services and HKD 40,000 for non-audit services[65]. - The audit identified the estimation of expected credit losses for contract assets and accounts receivable as a key audit matter due to its significance and inherent uncertainty[138]. - The audit procedures for contract asset and accounts receivable impairment included evaluating internal controls related to credit control and debt collection[137]. Investment and Assets - The total fair value of the group's investment properties as of March 31, 2020, was HKD 205,950,000, accounting for 58% of the total assets[135]. - The net fair value decrease recorded in the consolidated comprehensive income statement for the year ended March 31, 2020, was HKD 11,117,000[135]. - The group adopted an expected credit loss model to estimate impairment provisions for contract assets and accounts receivable, based on historical default experience and current financial condition of debtors[136]. - The group’s investment properties are located in Hong Kong and Singapore, including office, industrial, and residential properties[135]. Changes in Accounting Policies - The adoption of Hong Kong Financial Reporting Standard 16 resulted in a significant change in accounting policy, requiring the recognition of right-of-use assets and lease liabilities for all leases except for short-term leases and low-value asset leases[174]. - The company confirmed the recognition of right-of-use assets and corresponding lease liabilities for all lease arrangements, excluding short-term leases and low-value asset leases[197]. - Lease liabilities are measured at the present value of unpaid lease payments, discounted using the implicit rate or incremental borrowing rate if the implicit rate is not determinable[198].
香港通讯国际控股(00248) - 2020 - 年度财报