Financial Performance - For the fiscal year ending March 31, 2019, the group recorded total revenue of approximately HKD 166.7 million, a decrease of about 12.7% compared to HKD 190.8 million for the previous fiscal year[15]. - The profit attributable to the owners of the company was approximately HKD 5.8 million, representing a decline of 65.9% year-on-year; excluding the impact of listing expenses, the profit would have been approximately HKD 15.0 million, down 42.6%[15]. - The group's gross profit for the year ended March 31, 2019, was approximately HKD 118.3 million, a decrease of about 10.3% compared to HKD 131.8 million for the year ended March 31, 2018[23]. - The group's net profit attributable to owners was approximately HKD 5.8 million, a decrease of about 65.9% from HKD 17.1 million for the year ended March 31, 2018[30]. - The product profit margin improved from approximately 69.1% for the year ended March 31, 2018, to approximately 71.0% for the year ended March 31, 2019[23]. - Employee costs increased to approximately HKD 23.6 million, up about 10.4% from HKD 21.4 million for the year ended March 31, 2018, primarily due to additional remuneration for newly hired directors and bonuses post-IPO[25]. - Property rental and related expenses amounted to approximately HKD 52.7 million, an increase of about 5.1% from HKD 50.2 million for the year ended March 31, 2018, due to rent increases and the opening of two new retail stores[28]. - The group's cash and cash equivalents totaled approximately HKD 102.8 million as of March 31, 2019, a significant increase from HKD 6.3 million as of March 31, 2018, mainly due to net proceeds from the IPO[31]. - As of March 31, 2019, the group had bank borrowings of approximately HKD 137.7 million, with a debt-to-equity ratio of approximately 1.6 times[32]. - The group recorded a foreign exchange gain of approximately HKD 2.8 million for the year ended March 31, 2019, compared to a foreign exchange loss of approximately HKD 4.8 million for the year ended March 31, 2018[35]. Revenue Sources - The group's revenue primarily came from the sale of tile products, accounting for approximately 91.8% of total revenue for the year ending March 31, 2019[22]. - Retail operations contributed approximately 77.3% of total revenue, compared to 75.6% in the previous year, indicating a slight increase in retail's share of revenue[22]. Market Challenges and Opportunities - The group faced challenges due to the overall downturn in the Hong Kong real estate market and the escalating US-China trade conflict, which negatively impacted public investment and consumer sentiment[15]. - Future growth is anticipated due to ongoing infrastructure development projects in Hong Kong, which are expected to drive demand for tiles[17]. - The company plans to consolidate its leading position in the foreign tile retail market in Hong Kong and expand its product portfolio and diversity[17]. - The company is exploring strategic acquisition opportunities and expanding its sales network in the Chinese market[17]. - The board anticipates that the group will face several challenges in the foreseeable future due to uncertainties in the Hong Kong economy, including risks related to market price fluctuations and demand for tiles[52]. Corporate Governance - The company reported a commitment to strong corporate governance standards to enhance accountability, independence, and transparency, thereby creating value for shareholders[93]. - The board of directors is responsible for the overall strategy and management of the company, ensuring high standards in financial and management reporting[96]. - The company has established a corporate governance committee to oversee compliance with governance codes and principles[94]. - The roles of the chairman and CEO are currently held by the same individual, which the company believes is in its best interest given the current board composition[95]. - The company has adhered to all applicable governance code provisions since its listing, with some exceptions noted[94]. - The board consists of seven members, including two executive directors, two non-executive directors, and three independent non-executive directors[98]. - Independent non-executive directors account for more than one-third of the board, ensuring strong independence and the ability to provide independent judgment[99]. - The company adopted a board diversity policy in December 2018, focusing on various criteria such as gender, age, cultural background, and experience for new director candidates[100]. - The company has established several functional committees to assist the board in fulfilling its duties, including an audit committee formed on September 20, 2018[124]. Strategic Plans - The company plans to expand its retail network in Hong Kong by opening new stores in Wan Chai and Mong Kok[56]. - The company is currently negotiating with banks to release the guarantees provided by the group, which are related to bank financing for associated companies[39]. - The company aims to open two new retail stores in Q3 2018 and Q1 2019, focusing on bathroom products to assess customer demand and preferences[61]. - The company is identifying and evaluating potential acquisition targets in the bathroom products sector, with due diligence expected in H1 2019[65]. - The company plans to adjust its use of IPO proceeds based on market developments and business goals[72]. Employee and Director Information - The company has approximately 75 employees, with employee costs (including directors' remuneration) of about HKD 23.6 million and HKD 21.4 million for the years ending March 31, 2019, and 2018, respectively[40]. - The company appointed Mr. Liang Wei Chuen as a non-executive director in November 2017, who has over 25 years of experience in audit, accounting, and financial management[78]. - Mr. Huang Cheng Si was appointed as a non-executive director in January 2019, and he is a founding partner of a Hong Kong law firm, with experience in corporate governance[79]. - Mr. He Wing Tim, appointed as an independent non-executive director in September 2018, has served as a director and CEO of a property development company, leading business strategy execution[83]. - Mr. Wu, appointed as an independent non-executive director in September 2018, has over 14 years of experience in fund management and is currently the managing director of a major asset management company[84]. - Ms. Luo Cui Yu, appointed as an independent non-executive director in September 2018, has over 25 years of experience in accounting and financial management[85]. Dividend Policy - The company does not recommend the payment of any final dividend for the year ending March 31, 2019, compared to no dividend in 2018[51]. - The board's dividend policy aims to provide stable and sustainable returns to shareholders while retaining sufficient reserves for future development[44]. - The company reported a dividend of HKD 109,000,000 to its sole shareholder on September 10, 2018, with no further dividends recommended for the reporting period[189]. - The company has adopted a dividend policy as of December 2018, details of which can be found in the management discussion and analysis section of the annual report[162]. Charitable Contributions and Reserves - The company made charitable donations of approximately HKD 535,000 during the fiscal year ending March 31, 2019[193]. - The company's distributable reserves as of March 31, 2019, were approximately HKD 51.0 million, including share premium and accumulated losses[197]. Supplier Relationships - The top five suppliers accounted for 50.7% of the total purchases in the fiscal year ending March 31, 2019, down from 56.3% in 2018[199]. - The largest supplier represented approximately 18.0% of total procurement for the fiscal year ending March 31, 2019, compared to 23.5% in 2018[199]. - The company emphasizes maintaining good relationships with customers and suppliers for long-term business growth and development[198].
MOS HOUSE(01653) - 2019 - 年度财报