现恒建筑(01500) - 2020 - 中期财报

Corporate Information This section provides essential company details, including board members, auditor, bankers, registered office, and stock information BOARD OF DIRECTORS This section lists the company's executive and independent non-executive directors, as well as the composition of the audit, remuneration, and nomination committees - Executive directors include Liu Bowen, Zheng Rongchang, and Guan Jiexin[4] - Independent non-executive directors include Liang Zijian, Lin Zhixiong, and Qiu Zimin[4] AUDITOR The company has appointed KPMG as its auditor - The company's auditor is KPMG[4] PRINCIPAL BANKERS The company's principal bankers include Bank of China (Hong Kong) Limited, Wing Lung Bank Limited, and The Hongkong and Shanghai Banking Corporation Limited - Principal bankers include Bank of China (Hong Kong) Limited, Wing Lung Bank Limited, and The Hongkong and Shanghai Banking Corporation Limited[4] REGISTERED OFFICE AND HEADQUARTERS The company's registered office is in the Cayman Islands, and its headquarters and principal place of business in Hong Kong are located on the 26th floor of Parkview Centre, Causeway Bay, Hong Kong - Registered office is at Clifton House, Cayman Islands[5] - Headquarters and principal place of business in Hong Kong are on 26/F, Parkview Centre, 5 Moreton Terrace, Causeway Bay, Hong Kong[5] STOCK CODE The company's stock code is 1500, listed on the Hong Kong Stock Exchange - Hong Kong Stock Exchange stock code is 1500[5] Highlights This section presents key financial performance indicators for the reporting period Financial Highlights For the six months ended September 30, 2019, the company's revenue, gross profit, and net profit all increased, but gross margin slightly decreased Financial Highlights (HKD million) | Indicator | H1 2019 (HKD million) | H1 2018 (HKD million) | YoY Change (HKD million) | YoY Change (%) | | :--- | :---------------------- | :---------------------- | :------------------ | :----------- | | Revenue | 188.6 | 152.0 | +36.6 | +24.08% | | Gross Profit | 14.8 | 12.4 | +2.4 | +19.35% | | Net Profit | 2.5 | 1.9 | +0.6 | +31.58% | | EPS (HK cents) | 0.3 | 0.2 | +0.1 | +50.00% | | Gross Margin | 7.8% | 8.1% | -0.3% | -3.70% | Management Discussion and Analysis This section provides an overview of the Group's business operations, financial performance, liquidity, and future outlook BUSINESS AND FINANCIAL REVIEW The Group, as a foundation contractor in Hong Kong, focuses on design and build projects, with revenue and profit growth during the period, but a slight decrease in gross margin due to new projects in early stages - The Group is primarily engaged as a foundation contractor and in related works in Hong Kong, including demolition, site formation, ground investigation, and general building works[9][12] - The Group focuses on design and build projects, acting as the main contractor to provide more cost-effective solutions and competitive pricing[10][11][13] - For the six months ended September 30, 2019, 3 new foundation projects were awarded with a contract value of HKD 324.1 million; 1 existing project was completed; and 8 ongoing projects had an uncompleted contract value of HKD 715.5 million[14][15] Contract Performance (HKD million) | Indicator | 2019 (HKD million) | 2018 (HKD million) | YoY Change (HKD million) | YoY Change (%) | | :--- | :---------------- | :---------------- | :------------------ | :----------- | | Contract Revenue | 188.6 | 152.0 | +36.6 | +24.08% | | Gross Profit | 14.8 | 12.4 | +2.4 | +19.35% | | Gross Margin | 7.8% | 8.1% | -0.3% | -3.70% | | Administrative and Other Operating Expenses | 12.5 | 13.6 | -1.1 | -8.09% | | Profit for the Period | 2.5 | 1.9 | +0.6 | +31.58% | - The gross margin decrease was mainly due to three infrastructure projects being in their early stages, resulting in lower recognized revenue and gross profit[19][21] - The decrease in administrative and other operating expenses was primarily due to reduced depreciation of plant and equipment[20][22] LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE As of September 30, 2019, the Group's current ratio decreased, and gearing ratio increased due to new bank and shareholder loans, while maintaining prudent cash management and sufficient bank facilities Liquidity and Gearing Ratios | Indicator | Sep 30, 2019 | Mar 31, 2019 | Change | | :--- | :---------- | :---------- | :--- | | Current Ratio | 2.8 | 4.0 | -1.2 | | Gearing Ratio | 19.0% | 8.5% | +10.5% | - The gearing ratio increased by 10.5% mainly due to a new bank loan of HKD 10 million and a shareholder loan of HKD 13 million[24] Financial Resources (HKD million) | Indicator | Sep 30, 2019 (HKD million) | Mar 31, 2019 (HKD million) | | :--- | :----------------------- | :----------------------- | | Cash and Bank Balances | 44.5 | 45.6 | | Restricted Bank Deposits | 35.5 | 36.8 | | Bank Overdrafts | 2.0 | Nil | | Total Equity | 247.4 | 244.9 | | Total Debt | 47.0 | 20.7 (estimated) | - The Group has HKD 150.0 million in bank facilities, of which HKD 97.4 million is unutilized and unrestricted[24] EMPLOYEES As of September 30, 2019, the Group's full-time employees increased to 49, with competitive remuneration and benefits, including salaries, bonuses, training, and provident funds - As of September 30, 2019, the Group had 49 full-time employees (2018: 44)[26] - Remuneration and benefits include salaries, performance-based bonuses, and other benefits including training and provident funds[26] CAPITAL COMMITMENTS As of September 30, 2019, the Group had no capital commitments - As of September 30, 2019, the Group had no capital commitments[26] CHARGE ON GROUP ASSETS As of September 30, 2019, the Group had no other significant charges on assets, except as disclosed in note 11 to the financial statements - As of September 30, 2019, the Group had no other significant charges on assets, except as disclosed in note 11 to the financial statements[26] CONTINGENT LIABILITIES As of September 30, 2019, the Group had no other contingent liabilities, except as disclosed in note 19 to the financial statements - As of September 30, 2019, the Group had no other contingent liabilities, except as disclosed in note 19 to the financial statements[26] SIGNIFICANT INVESTMENTS HELD, MATERIAL ACQUISITIONS OR DISPOSALS OF SUBSIDIARIES AND AFFILIATED COMPANIES, AND PLANS FOR MATERIAL INVESTMENTS OR CAPITAL ASSETS For the six months ended September 30, 2019, the Group held no significant investments, made no material acquisitions or disposals of subsidiaries and affiliated companies, and had no other plans for material investments or capital assets - There were no significant investments, material acquisitions or disposals of subsidiaries and affiliated companies during the period[26] - As of September 30, 2019, there were no other plans for material investments or capital assets[26] USE OF NET PROCEEDS FROM LISTING The Group detailed the intended and actual use of net proceeds from listing as of September 30, 2019, showing most funds were used as planned Use of Net Proceeds (HKD million) | Purpose | Intended Use (HKD million) | Actual Use (HKD million) | | :--- | :---------------- | :---------------- | | Recruitment of additional staff | 2.9 | 2.9 | | Acquisition of additional machinery and equipment | 29.9 | 29.9 | | Financing for performance bonds for future projects | 56.7 | 45.0 | | General working capital | 10.0 | 10.0 | | Total | 99.5 | 87.8 | FUTURE PROSPECTS The Group anticipates a long-term recovery in Hong Kong's foundation industry and plans to maintain competitiveness by expanding capacity, enhancing design and project management capabilities, and offering flexible solutions - Hong Kong's foundation industry is expected to recover in the long term, benefiting from government policies to increase land supply and infrastructure investment[30][31] - Directors are confident in the Group's future net profit and operational scale development, thanks to its long-standing reputation, listing platform, and sound financial position[30][31] - To maintain competitiveness, the Group will continue to expand capacity, enhance foundation design capabilities and project management skills, and provide high-quality, flexible solutions to clients[30][31] Disclosure of Interests This section details the shareholding interests of the company's directors, chief executives, and substantial shareholders DIRECTORS' AND CHIEF EXECUTIVES' INTEREST IN SECURITIES As of September 30, 2019, the company's directors and chief executives held long positions in the company's shares, including interests through controlled corporations and spouses Directors' Interests in Securities | Director Name | Capacity/Nature of Interest | Number of Shares | Approximate % of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Liu Bowen | Interest in controlled corporation | 270,000,000 | 32.53% | | | Spouse's interest | 60,000,000 | 7.23% | | | Beneficial owner | 7,520,000 | 0.91% | | Total (Mr. Liu Bowen) | | 337,520,000 | 40.67% | | Mr. Zheng Rongchang | Interest in controlled corporation | 270,000,000 | 32.53% | | | Beneficial owner | 5,900,000 | 0.71% | | Total (Mr. Zheng Rongchang) | | 275,900,000 | 33.24% | | Ms. Guan Jiexin | Interest in controlled corporation | 60,000,000 | 7.23% | | | Spouse's interest | 277,520,000 | 33.44% | | Total (Ms. Guan Jiexin) | | 337,520,000 | 40.67% | | Mr. Qiu Zimin | Beneficial owner | 2,970,000 | 0.36% | - Directors' interests include shares held through their wholly-owned corporations (e.g., In Play Limited, Wealth Celebration Limited, Kinetic Kingdom Limited) and spouses' interests[36][37][38][41] SUBSTANTIAL SHAREHOLDERS' INTERESTS IN SECURITIES As of September 30, 2019, substantial shareholders, other than directors, held long positions in the company's shares, including In Play Limited, Wealth Celebration Limited, and Kinetic Kingdom Limited Substantial Shareholders' Interests in Securities | Substantial Shareholder Name | Capacity/Nature of Interest | Number of Shares | Approximate % of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | In Play Limited | Beneficial owner | 270,000,000 | 32.53% | | Wealth Celebration Limited | Beneficial owner | 270,000,000 | 32.53% | | Kinetic Kingdom Limited | Beneficial owner | 60,000,000 | 7.23% | Corporate Governance and Other Information This section outlines the company's corporate governance practices, dividend policy, and other relevant disclosures INTERIM DIVIDEND The Board resolved not to declare an interim dividend for the six months ended September 30, 2019 (2018: nil) - For the six months ended September 30, 2019, the Board resolved not to declare an interim dividend (2018: nil)[43] PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[43] EVENTS AFTER THE REPORTING PERIOD The Board is not aware of any significant events after September 30, 2019, up to the date of this report that require disclosure - The Board is not aware of any significant events after September 30, 2019, up to the date of this report that require disclosure[43] CORPORATE GOVERNANCE The company is committed to high standards of corporate governance and complies with the Corporate Governance Code, with the Chairman and CEO roles held by the same person to ensure strategic consistency, and independent non-executive directors and the audit committee maintaining independence - The company has adopted, applied, and complied with the Corporate Governance Code in Appendix 14 of the Listing Rules, except for a deviation from code provision A.2.1[44] - Mr. Liu Bowen serves as both Chairman and Chief Executive Officer, an arrangement the Board believes ensures consistent and continuous planning and execution of the company's strategies[44] - The Board comprises an equal number of independent non-executive directors and executive directors, and the audit committee consists solely of independent non-executive directors, to enhance independence[44] COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended September 30, 2019 - All directors confirmed compliance with the required standards set out in the Model Code for the six months ended September 30, 2019[44] REVIEW OF INTERIM RESULTS The interim financial report for the six months ended September 30, 2019, was not audited but reviewed by KPMG, and the audit committee reviewed accounting policies, practices, and interim results - The interim financial report was unaudited but reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, and an unmodified review report was issued[46] - The audit committee has reviewed the accounting policies and practices adopted by the Group, as well as the interim results and financial report[46] SPECIFIC PERFORMANCE OF CONTROLLING SHAREHOLDERS UNDER RULE 13.18 OF THE LISTING RULES As a guarantor for bank financing, the company committed to lenders that Mr. Liu Bowen, Mr. Zheng Rongchang, and Ms. Guan Jiexin would collectively maintain at least 50% beneficial ownership, with one of them continuing as Chairman, a breach of which would constitute an event of default - Mr. Liu Bowen, Mr. Zheng Rongchang, and Ms. Guan Jiexin must maintain a total beneficial ownership of not less than 50% of the company's entire issued share capital[46] - The financing agreement requires any one of Mr. Liu Bowen, Mr. Zheng Rongchang, and Ms. Guan Jiexin to remain as the company's Chairman[46] - A breach of the above undertakings would constitute an event of default, allowing the lender to cancel or suspend financing and demand repayment[46] Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the Group's financial performance, including revenue, profit, and other comprehensive income for the period Consolidated Profit or Loss For the six months ended September 30, 2019, the Group recorded revenue of HKD 188.6 million, gross profit of HKD 14.8 million, profit for the period of HKD 2.5 million, and basic and diluted earnings per share of HKD 0.30 cents Consolidated Profit or Loss (HKD thousand) | Indicator | 2019 (HKD thousand) | 2018 (HKD thousand) | | :--- | :--- | :--- | | Revenue | 188,587 | 151,988 | | Direct Costs | (173,808) | (139,605) | | Gross Profit | 14,779 | 12,383 | | Other Income | 1,152 | 3,641 | | Administrative and Other Operating Expenses | (12,505) | (13,607) | | Operating Profit | 3,426 | 2,417 | | Finance Costs | (575) | (28) | | Profit Before Taxation | 2,851 | 2,389 | | Income Tax | (322) | (488) | | Profit and Total Comprehensive Income for the Period | 2,529 | 1,901 | | EPS (HK cents) | 0.30 | 0.23 | Consolidated Statement of Financial Position This section provides a snapshot of the Group's assets, liabilities, and equity at the end of the reporting period Consolidated Financial Position As of September 30, 2019, the Group's total assets less current liabilities were HKD 264.9 million, and net assets (total equity) were HKD 247.4 million Consolidated Financial Position (HKD thousand) | Indicator | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 296 | 403 | | Lease Receivables | 17,489 | 16,857 | | Deferred Tax Assets | 51 | 42 | | Total Non-current Assets | 17,836 | 17,302 | | Current Assets | | | | Inventories | 831 | 1,514 | | Lease Receivables | 4,547 | 3,814 | | Trade and Other Receivables | 125,423 | 143,617 | | Contract Assets | 204,226 | 128,742 | | Tax Recoverable | 3,306 | 3,574 | | Cash and Bank Balances | 44,525 | 45,611 | | Total Current Assets | 382,858 | 326,872 | | Current Liabilities | | | | Contract Liabilities | 3,662 | 2,238 | | Trade and Other Payables | 102,542 | 76,353 | | Bank Overdrafts – Secured | 2,013 | – | | Bank Loans – Secured | 10,000 | – | | Shareholder Loan | 13,000 | – | | Lease Liabilities | 4,547 | 3,814 | | Total Current Liabilities | 135,764 | 82,405 | | Net Current Assets | 247,094 | 244,467 | | Total Assets Less Current Liabilities | 264,930 | 261,769 | | Non-current Liabilities | | | | Lease Liabilities | 17,489 | 16,857 | | Net Assets / Total Equity | 247,441 | 244,912 | Consolidated Statement of Changes in Equity This section details the changes in the Group's equity attributable to owners of the company during the reporting period Equity Changes For the six months ended September 30, 2019, total equity attributable to equity holders of the company increased from HKD 244.9 million to HKD 247.4 million, primarily reflecting the profit for the period of HKD 2.5 million Consolidated Statement of Changes in Equity (HKD thousand) | Indicator | Share Capital (HKD thousand) | Share Premium (HKD thousand) | Capital Reserve (HKD thousand) | Retained Profits (HKD thousand) | Total Equity (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mar 31, 2019 | 8,300 | 75,453 | (35,952) | 197,111 | 244,912 | | Profit and Total Comprehensive Income for the Period | – | – | – | 2,529 | 2,529 | | Sep 30, 2019 | 8,300 | 75,453 | (35,952) | 199,640 | 247,441 | Condensed Consolidated Cash Flow Statement This section summarizes the Group's cash flows from operating, investing, and financing activities for the reporting period Condensed Cash Flow For the six months ended September 30, 2019, the Group saw a decrease in net cash used in operating activities, a decrease in net cash from investing activities, and a significant increase in net cash from financing activities, resulting in a net decrease in cash and cash equivalents Condensed Consolidated Cash Flow (HKD thousand) | Activity | 2019 (HKD thousand) | 2018 (HKD thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (26,416) | (29,307) | | Net Cash From Investing Activities | 4,240 | 6,669 | | Net Cash From/(Used in) Financing Activities | 20,373 | (28) | | Net Decrease in Cash and Cash Equivalents | (1,803) | (22,666) | | Cash and Cash Equivalents at Beginning of Period | 8,836 | 20,542 | | Cash and Cash Equivalents at End of Period | 7,033 | (2,124) | Notes to the Financial Statements This section provides detailed explanations and disclosures supporting the interim financial statements 1 GENERAL INFORMATION The Group is primarily engaged as a foundation contractor in Hong Kong, incorporated in the Cayman Islands in 2014, and listed on the Stock Exchange in 2015 - The Group is primarily engaged as a foundation contractor in Hong Kong[59] - The company was incorporated in the Cayman Islands on September 29, 2014[59] - The company's shares were listed on the Stock Exchange on April 16, 2015[59] 2 BASIS OF PREPARATION The interim financial report is prepared in accordance with the Listing Rules and HKAS 34, using the same accounting policies as the 2019 annual financial statements, and has been reviewed by KPMG - The interim financial report is prepared in accordance with the applicable disclosure provisions of the Listing Rules and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[59] - The interim financial report adopts the same accounting policies as the 2019 annual financial statements, except for expected changes[59] - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[60][61] 3 CHANGES IN ACCOUNTING POLICIES The Group adopted new HKFRS 16 "Leases", but it had no significant impact on the financial statements as all operating lease commitments are short-term or low-value leases, and lessor accounting policies remained largely unchanged - The Hong Kong Institute of Certified Public Accountants has issued new HKFRS 16 "Leases" and several amendments, effective for the first time in this accounting period[64][65] - The Group decided to apply recognition exemptions for short-term leases and leases of low-value assets, thus having no impact on the financial statements[67] - The Group, as a lessor in finance leases, applies accounting policies that are substantially the same as those applied under HKAS 17[69] 4 REVENUE AND SEGMENT INFORMATION The Group's revenue primarily derives from construction contracts, and no segment information is presented as the business is considered a single operating segment operating only in Hong Kong - Revenue refers to construction contract revenue earned during the period[70][74] - The chief operating decision-maker views the Group's business as a single operating segment and operates only in Hong Kong, thus no segment information is presented[71][75] 5 OTHER REVENUE For the six months ended September 30, 2019, other revenue decreased from HKD 3.641 million in 2018 to HKD 1.152 million, primarily due to a significant reduction in machinery rental income Other Revenue (HKD thousand) | Item | 2019 (HKD thousand) | 2018 (HKD thousand) | | :--- | :--- | :--- | | Bank Interest Income | 335 | 296 | | Interest Income from Lease Receivables | 503 | – | | Sale of Scraps | 296 | 311 | | Rental Income from Machinery | – | 3,000 | | Others | 18 | 34 | | Total | 1,152 | 3,641 | - Machinery rental income decreased from HKD 3.0 million in 2018 to zero in 2019[77] 6 PROFIT BEFORE TAXATION Profit before taxation is stated after deducting finance costs, staff costs, and other items, with finance costs significantly increasing due to new bank loans and lease liabilities interest, while depreciation expenses substantially decreased Profit Before Taxation Items (HKD thousand) | Item | 2019 (HKD thousand) | 2018 (HKD thousand) | | :--- | :--- | :--- | | (a) Finance Costs | | | | Bank Overdraft Interest | 1 | 28 | | Bank Loan Interest | 71 | – | | Lease Liabilities Interest | 503 | – | | Total | 575 | 28 | | (b) Staff Costs | | | | Defined Contribution Retirement Plan Contributions | 399 | 350 | | Salaries, Wages and Other Benefits | 15,286 | 11,914 | | Total | 15,685 | 12,264 | | (c) Other Items | | | | Depreciation | 125 | 2,886 | | Lease Charges for Leased Office | 596 | 596 | - Depreciation expenses significantly decreased from HKD 2.886 million in 2018 to HKD 0.125 million in 2019[79] 7 INCOME TAX Income tax for the period was HKD 0.322 million, mainly comprising Hong Kong profits tax provision and deferred tax reversal, with Hong Kong profits tax rate at 16.5% and a two-tiered rate applicable to some subsidiaries Income Tax (HKD thousand) | Item | 2019 (HKD thousand) | 2018 (HKD thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax Provision for the Period | 331 | 794 | | Origination and Reversal of Temporary Differences (Deferred Tax) | (9) | (306) | | Total | 322 | 488 | - Hong Kong profits tax provision is calculated at an estimated effective annual tax rate of 16.5%, with a two-tiered profits tax rate (8.25% for the first HKD 2 million of assessable profits, and 16.5% thereafter) applicable to one subsidiary[81] - The Group is not subject to any income tax in the Cayman Islands and British Virgin Islands[81] 8 EARNINGS PER SHARE For the six months ended September 30, 2019, basic earnings per share were HKD 0.30 cents, based on profit for the period of HKD 2.529 million and a weighted average of 830 million shares. No dilutive potential shares existed during the period Earnings Per Share | Indicator | 2019 | 2018 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders | HKD 2,529,000 | HKD 1,901,000 | | Weighted Average Number of Shares in Issue | 830,000,000 shares | 830,000,000 shares | | Basic EPS (HK cents) | 0.30 | 0.23 | - As of September 30, 2019 and 2018, no dilutive potential shares existed[81] 9 PROPERTY, PLANT AND EQUIPMENT For the six months ended September 30, 2019, the Group acquired office equipment of HKD 18,000, a decrease from the prior year, with no disposals of property, plant, and equipment during the period Property, Plant and Equipment Acquisitions (HKD) | Item | 2019 (HKD) | 2018 (HKD) | | :--- | :--- | :--- | | Office Equipment Acquisition | 18,000 | 47,000 | - There were no disposals of any property, plant and equipment during the six months ended September 30, 2019 and 2018[84][86] 10 TRADE AND OTHER RECEIVABLES As of September 30, 2019, net trade receivables increased to HKD 54.678 million, while retention receivables significantly decreased, leading to a decrease in total trade and other receivables Trade Receivables Aging (HKD thousand) | Aging | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Within one month | 34,999 | 35,595 | | One to two months | 18,178 | – | | Two to three months | – | – | | Over three months | 1,501 | 15,086 | | Trade Receivables, net of loss allowance | 54,678 | 50,681 | Other Receivables (HKD thousand) | Item | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Deposits, Prepayments and Other Receivables | 35,171 | 36,635 | | Retention Receivables | 35,569 | 56,294 | | Amounts Due from Shareholders | 5 | 7 | | Total Trade and Other Receivables | 125,423 | 143,617 | - All receivables (including deposits, prepayments, retention receivables, and amounts due from shareholders) are expected to be recovered within one year[87] 11 CASH AND BANK BALANCES As of September 30, 2019, cash and bank balances slightly decreased to HKD 44.525 million, including restricted bank deposits of HKD 35.479 million and bank overdrafts of HKD 2.013 million Cash and Bank Balances (HKD thousand) | Item | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Cash and Bank on Hand | 9,046 | 8,836 | | Bank Deposits | 35,479 | 36,775 | | Cash and Bank Balances in Consolidated Statement of Financial Position | 44,525 | 45,611 | | Less: Restricted Bank Deposits | (35,479) | (36,775) | | Less: Bank Overdrafts | (2,013) | – | | Cash and Cash Equivalents in Condensed Consolidated Cash Flow Statement | 7,033 | 8,836 | - Restricted bank deposits are used to secure performance bonds, bank overdrafts, and bank facilities[92] 12 CONTRACT ASSETS AND CONTRACT LIABILITIES As of the reporting period end, all contract assets arose from the performance of construction contracts, while contract liabilities arose from advances received for construction contracts - Contract assets arise from the performance of construction contracts[94] - Contract liabilities arise from advances received for construction contracts[94] 13 TRADE AND OTHER PAYABLES As of September 30, 2019, trade payables increased to HKD 89.404 million, and total trade and other payables significantly increased to HKD 102.542 million, including an amount due to a shareholder Trade Payables Aging (HKD thousand) | Aging | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Within one month | 41,664 | 29,041 | | One to two months | 6,390 | 14,705 | | Two to three months | 17,023 | 14,271 | | Over three months | 24,327 | 12,561 | | Trade Payables | 89,404 | 70,578 | Other Payables (HKD thousand) | Item | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Other Payables and Accrued Expenses | 13,130 | 5,775 | | Amount Due to a Shareholder | 8 | – | | Total Trade and Other Payables | 102,542 | 76,353 | - The amount due to a shareholder is unsecured, interest-free, and has no fixed repayment terms[99] 14 BANK LOAN – SECURED As of September 30, 2019, the Group had a HKD 10 million bank loan secured by HKD 13.5 million in bank deposits, with an annual interest rate of 4.3%, repayable within one year - As of September 30, 2019, the bank loan was secured by bank deposits totaling HKD 13,500,000[100] - The bank loan has an annual interest rate of 4.3% and is repayable within one year[100] 15 LOAN FROM A SHAREHOLDER The Group has an unsecured, interest-free loan from a shareholder, repayable upon two months' notice - The shareholder loan is unsecured, interest-free, and repayable upon two months' notice[101] 16 CAPITAL, RESERVES AND DIVIDENDS This section details the Group's share capital and reserves, confirming no interim dividends were declared or paid for the six months ended September 30, 2019 16(a) Dividends For the six months ended September 30, 2019, no interim dividends were declared or paid, nor were any dividends attributable to the previous financial year approved or paid to the company's equity holders - For the six months ended September 30, 2019, no interim dividends were declared or paid (2018: nil)[104] - During the interim period, no dividends attributable to the previous financial year were approved and paid to the company's equity holders[105][106] 16(b) Share capital The company's authorized share capital is 2,000,000,000 ordinary shares of HKD 0.01 each, totaling HKD 20,000,000. Issued and fully paid share capital is 830,000,000 shares, totaling HKD 8,300,000 Share Capital (HKD thousand) | Item | Number of Shares | Amount (HKD thousand) | | :--- | :--- | :--- | | Authorized – Ordinary shares of HKD 0.01 each | 2,000,000,000 | 20,000 | | Ordinary shares, issued and fully paid | 830,000,000 | 8,300 | 17 FAIR VALUES MEASUREMENT OF FINANCIAL INSTRUMENTS As of September 30, 2019, and March 31, 2019, there were no significant differences between the carrying amounts and fair values of the Group's financial instruments accounted for at cost or amortized cost - There were no significant differences between the carrying amounts and fair values of the Group's financial instruments accounted for at cost or amortized cost[112] 18 COMMITMENTS As of September 30, 2019, the Group's total future minimum lease payments under non-cancellable operating leases increased to HKD 1.026 million, all payable within one year, with the Group applying recognition exemptions for short-term and low-value leases Commitments (HKD thousand) | Period | Sep 30, 2019 (HKD thousand) | Mar 31, 2019 (HKD thousand) | | :--- | :--- | :--- | | Within one year | 1,026 | 487 | | After one year but within five years | – | 72 | | Total | 1,026 | 559 | - The Group is a lessee for office and office equipment leases, with initial lease terms typically one to five years and no contingent rents[114] - The Group applies recognition exemptions for short-term leases and leases of low-value assets under HKFRS 16[114] 19 CONTINGENT LIABILITIES As of September 30, 2019, the Group's contingent liabilities for performance bonds guaranteeing its subsidiaries' proper performance of project obligations increased to HKD 89.827 million, expected to be released according to contract terms Contingent Liabilities (HKD) | Item | Sep 30, 2019 (HKD) | Mar 31, 2019 (HKD) | | :--- | :--- | :--- | | Performance Bond Contingent Liabilities | 89,827,000 | 86,692,000 | - Performance bonds are used to guarantee the proper performance of the Group's subsidiaries' obligations for projects undertaken[115][117] - Performance bonds are expected to be released in accordance with the terms of the respective construction contracts[115][117] 20 MATERIAL RELATED PARTY TRANSACTIONS The Group had material related party transactions during the period, including key management personnel compensation and rental expenses paid to an associated company, which the directors believe were entered into in the ordinary course of business Material Related Party Transactions (HKD thousand) | Item | 2019 (HKD thousand) | 2018 (HKD thousand) | | :--- | :--- | :--- | | Key Management Personnel Compensation | 3,367 | 2,729 | | Rental Expenses Paid to an Associated Company | 596 | 596 | - The company's directors believe the above transactions were entered into in the ordinary course of business[120] Review Report to the Board of Directors This section presents the independent review report on the interim financial information by the auditor INTRODUCTION KPMG reviewed the interim financial report for the six months ended September 30, 2019, prepared in accordance with the Listing Rules and HKAS 34, with the Board responsible for its preparation and presentation - KPMG has reviewed the interim financial report for the six months ended September 30, 2019[122] - The preparation and presentation of the interim financial report comply with the Listing Rules and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[122] SCOPE OF REVIEW The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, primarily involving inquiries and analytical procedures, with a scope significantly narrower than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[124][127] - The scope of the review is significantly narrower than an audit, and therefore no audit opinion is expressed[124][127] CONCLUSION Based on the review, KPMG found no matters that lead it to believe the interim financial report as of September 30, 2019, was not prepared in all material respects in accordance with HKAS 34 - Based on the review, no matters were found that lead KPMG to believe the interim financial report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[130][131]