Financial Performance - Revenue for the year ended March 31, 2020, was HKD 590,873,000, a decrease of 7.9% from HKD 641,733,000 in 2019[7] - Gross profit increased to HKD 111,372,000, resulting in a gross margin of 18.8%, up from 14.5% in the previous year[7] - The company reported a loss before tax of HKD 59,471,000, compared to a loss of HKD 22,122,000 in 2019[7] - EBITDA for the year was reported at a loss of HKD 30,450,000, compared to a profit of HKD 1,942,000 in 2019[7] - The company recorded a loss of approximately HKD 58,638,000 for the year, compared to a loss of about HKD 22,670,000 in the previous year, primarily due to expected credit losses from a major customer[20] - The expected credit loss for trade and other receivables increased significantly from approximately HKD 515,000 to about HKD 53,067,000 year-over-year[22] Assets and Liabilities - Total assets decreased to HKD 372,730,000 from HKD 385,633,000 in the previous year[7] - Cash and bank balances fell to HKD 47,836,000, down from HKD 75,687,000 in 2019[7] - The company’s debt-to-equity ratio increased significantly to 323.9% from 99.3% in the previous year[7] - Total borrowings increased by approximately 21.5% to about HKD 231,439,000, up from HKD 190,443,000 in 2019, attributed to the acquisition of intellectual property and capital expenditures[32] - The asset-to-liability ratio as of March 31, 2020, was approximately 408.2%, significantly up from 164.8% in 2019, mainly due to increased expected credit losses and disruptions in cash flow[40] Operational Changes - The Sri Lanka factory expansion plan was put on hold due to the impact of COVID-19 on the supply chain[10] - The company experienced a significant reduction in workforce at the Panyu factory, with a decrease of about one-third to approximately 390 employees[9] - The Sri Lanka factory reduced its workforce by approximately 300 employees in May 2020 due to organizational restructuring[20] - The company has shifted most procurement functions to its Panyu facility, resulting in monthly salary savings of about HKD 1,000,000[20] - The company implemented a 30% salary reduction for all staff in the Hong Kong office starting April 1, 2020, in response to anticipated sales declines[20] Customer and Market Impact - The major customer, which accounted for 50% to 70% of total revenue, filed for Chapter 11 protection, with outstanding receivables totaling approximately USD 15,000,000 or HKD 120,000,000[20] - The group's sales volume for the year was approximately 2,750,600 garments, a decrease of about 28.2% from 3,830,000 garments in 2019, primarily due to a 40.3% drop in lower garment sales[25] - The average selling price of all clothing products increased to approximately HKD 214.5 per piece, compared to HKD 167.6 per piece in the previous year[25] Cost Management - Sales and distribution costs decreased by approximately 7.6% to about HKD 37,923,000, down from HKD 41,048,000 in 2019, consistent with the decline in sales revenue[26] - General and administrative expenses increased by approximately HKD 8,023,000 to about HKD 70,280,000, up from HKD 62,257,000 in the previous year, mainly due to higher personnel and other costs[29] - Financing costs rose by approximately 24.1% to about HKD 9,905,000, up from HKD 7,984,000 in 2019, primarily due to increased lease liabilities and borrowings[30] - The company has implemented cost-cutting measures expected to save over HKD 20,000,000 annually, including workforce reductions and salary cuts of up to 33.3%[36] Governance and Compliance - The company has adopted and complied with the corporate governance code as per the Hong Kong Stock Exchange's Main Board Listing Rules[71] - The board consists of seven members, including three executive directors, one non-executive director, and three independent non-executive directors[76] - The company has a strong focus on risk management and internal control systems, delegating daily operations to the CEO and senior management[82] - The Audit Committee consists of three independent non-executive directors, ensuring compliance with financial reporting standards and effective audit procedures[88] - The Remuneration Committee is responsible for determining the remuneration packages of all executive directors and senior management, ensuring transparency in the process[93] Shareholder Information - The company has no capital commitments or contingent liabilities as of March 31, 2020[46] - The maximum number of shares that may be issued upon the exercise of options under the share option scheme is 80,000,000 shares, representing 10% of the total issued shares as of the report date[159] - The stock option plan has a validity period of ten years from the date of adoption, with no stock options granted since its adoption[166] - The company has no arrangements that would allow directors to benefit from acquiring shares of the company or any other entity[174] - Major shareholders include Moonlight Global Holdings with 300,000,000 shares (37.5%) and Rainbow Galaxy Limited with 272,000,000 shares (34.0%) [181]
STERLING GP(01825) - 2020 - 年度财报