Financial Performance - For the year ended March 31, 2021, the Group's revenue was approximately HK$106.7 million, a decrease of 40.2% from approximately HK$178.6 million in 2020[11]. - The Group recorded a net loss of approximately HK$6.5 million for the year, compared to a net profit of approximately HK$20.9 million for the year ended March 31, 2020[12]. - Revenue decreased by approximately HK$71.9 million, or 40.3%, to approximately HK$106.7 million for the Year, down from approximately HK$178.6 million for the year ended 31 March 2020[30]. - Gross profit decreased by approximately HK$27.4 million, or 41.3%, to approximately HK$39.0 million for the Year, with a gross profit margin of approximately 36.6%[38]. - Total comprehensive income for the year resulted in a loss of approximately HK$1.7 million, compared to a gain of approximately HK$18.0 million in the previous year[35]. Revenue Sources - Revenue generated from Hong Kong contributed approximately HK$99.3 million, accounting for about 93.1% of total revenue during the year, down from 95.1% in 2020[22]. - Revenue from the manufacturing and trading of DTH rockdrilling tools accounted for approximately 89.0% of total revenue during the Year, up from approximately 80.8% in the previous year[30]. - Revenue generated from Macau increased to approximately HK$4.6 million, contributing approximately 4.3% of total revenue, compared to approximately HK$2.9 million and 1.6% in the previous year[26]. - Revenue from the Scandinavia region decreased to approximately HK$2.0 million, representing approximately 1.9% of total revenue, down from approximately HK$3.2 million and 1.8% in the previous year[27]. - Revenue from trading of piling and drilling machineries contributed approximately 2.6% of total revenue, down from approximately 9.9% in the previous year[29]. - Revenue from trading of rockdrilling equipment accounted for approximately 8.3% of total revenue, a decrease from approximately 9.3% in the previous year[31]. Market Conditions - The stagnant market environment in Hong Kong was attributed to a slowdown in public works budget approvals due to the COVID-19 pandemic, leading to fewer construction projects[21]. - The overall construction activity in Hong Kong was at a comparatively lower level, impacting the demand for the Group's products[11]. - The business environment in Hong Kong remained stagnant, leading to lower demand for products due to reduced construction works and projects[37]. Strategic Focus - The Group plans to focus on the manufacturing and trading of down-the-hole (DTH) rockdrilling tools and aims to strengthen its presence in overseas markets[13]. - The Group intends to allocate more resources towards the development of its DTH rockdrilling tools business to maximize long-term returns for shareholders[13]. - The Group's management remains cautious about market prospects while focusing on core business operations[13]. Financial Position - As of 31 March 2021, total cash and cash equivalents amounted to approximately HK$87.4 million, a decrease from approximately HK$101.4 million as of 31 March 2020[55]. - The Group had no bank borrowings as of 31 March 2021, with other borrowings remaining at approximately HK$20.0 million, at a fixed interest rate of 1.0%[56]. - The gearing ratio as of 31 March 2021 was approximately 18.7%, slightly down from 19.3% as of 31 March 2020[57]. - The group maintained a comfortable financial and liquidity position, with no bank borrowings as of March 31, 2021, and deposits of approximately HK$4.7 million pledged to secure banking facilities[68][69]. Corporate Governance - The Company has adopted the Corporate Governance Code and has complied with most provisions, except for Code Provisions A.2.1 and A.4.1[88]. - The Board consists of at least three Independent Non-executive Directors, representing at least one-third of the Board, in compliance with Listing Rules[96]. - The Audit and Compliance Committee consists of three independent non-executive directors, responsible for overseeing financial reporting and internal control systems[119]. - The Company has established procedures for the appointment of directors, with terms set at three years[110]. - The Company emphasizes meritocracy in Board appointments while considering diversity perspectives[149]. Risk Management - The Group has established an enterprise risk management framework, with the Board responsible for maintaining effective internal controls and management tasked with implementing these systems[162]. - Principal risks identified include financial risks such as foreign exchange rate risk, operational risks related to sales and purchases concentration, and strategic risks from reduced market demand[167]. - The effectiveness of the risk management framework is evaluated at least annually, with periodic management meetings to update risk monitoring progress[174]. - The Group will continue to engage external independent professionals for annual reviews of its internal controls and risk management systems[179]. Employee Information - As of March 31, 2021, the company had issued share capital of HK$38 million and 380 million ordinary shares, with no changes in the statutory and issued share capital during the year[62]. - As of March 31, 2021, the group had approximately 88 employees, a decrease from approximately 104 employees in 2020[83]. Shareholder Communication - The Company values effective communication with shareholders and maintains a website for public access to business operations and financial information[196]. - The annual general meeting serves as a platform for direct communication between the Board and shareholders, with separate resolutions proposed for each issue[197]. - The Company will handle shareholder inquiries in a timely and appropriate manner[194].
煜荣集团(01536) - 2021 - 年度财报