中国万天控股(01854) - 2021 - 年度财报

Company Information This section provides core company details including board members, committee composition, company secretary, legal advisors, auditor, share registrar, principal bankers, and company website - This section provides core company information, including board members, committee composition, company secretary, legal advisors, auditor (PricewaterhouseCoopers), share registrar, principal bankers, and company website[3][4] Chairman's Statement The Chairman's Statement reviews the challenging year 2020 impacted by the COVID-19 pandemic, highlighting the group's proactive measures to address market volatility and maintain cautious optimism for future business recovery - The Chairman's Statement reviews the challenging year 2020, impacted by the COVID-19 pandemic, noting the difficult operating environment for the catering industry and reduced demand for food ingredients[6][8] Annual Performance Summary | Indicator | Year Ended March 31, 2021 | Year Ended March 31, 2020 | | :--- | :--- | :--- | | Total Revenue | Approx. HK$106.7 million | Approx. HK$154.1 million | | Net Loss | Approx. HK$8.2 million | Approx. HK$4.7 million | Management Discussion and Analysis Business Review and Outlook The Group primarily procures, processes, and supplies food ingredients to Hong Kong catering operators, recording an expanded net loss of approximately HK$8.2 million due to reduced revenue and gross profit amid the pandemic, with future strategies focusing on market monitoring, new supply sources, and cost management - For the year ended March 31, 2021, the Group recorded a net loss of approximately HK$8.2 million, an increase from HK$4.7 million in the prior year, primarily due to decreased revenue and lower gross profit[10] - Future strategies include closely monitoring market conditions, exploring new sources for vegetables and fruits, fine-tuning product mix, and implementing cost management measures[11] Financial Performance Analysis This fiscal year, the Group's financial performance was significantly impacted, with revenue down 30.8% year-on-year, gross profit down 31.3%, and a substantial increase in impairment losses on trade receivables to HK$6.9 million, leading to an expanded loss attributable to equity holders of HK$8.2 million Year-on-Year Financial Metric Changes | Indicator | FY2021 (HK$ million) | FY2020 (HK$ million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 106.7 | 154.1 | -30.8% | | Cost of Sales | 93.5 | 134.9 | -30.7% | | Gross Profit | 13.2 | 19.2 | -31.3% | | Gross Profit Margin | 12.4% | 12.5% | -0.1pp | | Impairment Loss on Trade Receivables | 6.9 | 0.7 | +885.7% | | Selling and Administrative Expenses | 18.1 | 21.5 | -15.8% | | Loss Attributable to Equity Holders | 8.2 | 4.7 | +74.5% | Use of Listing Proceeds The company raised net proceeds of approximately HK$47.8 million from its listing, with approximately HK$47.6 million utilized by March 31, 2021, primarily for acquiring a new processing base, enhancing human resources, and expanding the logistics team, leaving HK$0.2 million unutilized for sales channel improvement Details of Use of Listing Proceeds (as of March 31, 2021) | Purpose | Planned Use (HK$ million) | Actual Use (HK$ million) | Unutilized Funds (HK$ million) | | :--- | :--- | :--- | :--- | | Acquisition of new processing base, facilities, and equipment | 23.7 | 23.7 | – | | Further enhancement of human resources | 9.1 | 9.1 | – | | Expansion of logistics team | 9.7 | 9.7 | – | | Improvement of sales channels | 0.5 | 0.3 | 0.2 | | General working capital | 4.8 | 4.8 | – | | Total | 47.8 | 47.6 | 0.2 | Liquidity, Financial Resources, and Risk Management The Group primarily meets liquidity needs through operating cash and bank borrowings, with bank balances and cash of approximately HK$37.4 million and bank borrowings of HK$43.4 million at period-end, while facing credit concentration risk in trade receivables where the top five customers account for 64.8% of the total Liquidity and Capital Structure (as of March 31) | Indicator | 2021 (HK$ million) | 2020 (HK$ million) | | :--- | :--- | :--- | | Bank Borrowings | 43.4 | 48.5 | | Bank Balances and Cash | 37.4 | 32.8 | | Gearing Ratio | 46.5% | 47.8% | - The Group faces credit concentration risk in trade receivables, with the top five customers accounting for approximately 64.8% of the total as of March 31, 2021[30] - The Group's transactions are predominantly settled in Hong Kong Dollars, and thus the Directors believe the Group is not exposed to significant foreign exchange risk[24] Environmental, Social and Governance Report ESG Governance and Reporting Framework This report details the Group's ESG performance, outlining a top-down governance structure overseen by the Board, with designated personnel managing ESG matters, and identifying key issues like product quality, occupational health, and customer satisfaction through stakeholder engagement and materiality assessment - The Group adopts a top-down ESG management approach, with the Board responsible for overseeing and formulating ESG strategies, and designated personnel managing specific matters[34] - Through materiality assessment, the Group identified key ESG issues most significant to its business and stakeholders, including product quality management, occupational health and safety, customer satisfaction, and corporate profitability[40][43] Environmental Performance The Group is committed to reducing its environmental impact, achieving a decrease in total greenhouse gas emissions from 806 to 751 tonnes of CO2e, significant reductions in total energy consumption (7.2%) and water consumption (58%), and actively managing waste through source reduction and recycling Greenhouse Gas Emissions (tonnes of CO2e) | Scope | 2021 | 2020 | | :--- | :--- | :--- | | Scope 1 – Direct Emissions | 421 | 274 | | Scope 2 – Energy Indirect Emissions | 303 | 520 | | Scope 3 – Other Indirect Emissions | 27 | 12 | | Total Greenhouse Gas Emissions | 751 | 806 | Resource Consumption | Indicator | Unit | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Total Energy Consumption | kWh | 1,274,297 | 1,372,947 | | Total Water Consumption | cubic meters | 4,316 | 10,261 | | Total Non-Hazardous Waste | tonnes | 24 | 22 | Social Performance The Group values its employees, providing an equitable, safe, and developmental work environment, with 81 employees and a 30% turnover rate, reporting one work-related injury, while strictly adhering to labor standards, managing a supply chain of 68 vendors with a focus on food safety, and actively engaging in community investment through food donations - As of March 31, 2021, the Group employed 81 staff in Hong Kong, with 57% male and 43% female, and the 51 years or above age group accounting for the largest proportion (49%)[72][73][74] - During the reporting period, the Group recorded 1 reported work-related injury, resulting in a cumulative loss of 27 working days[83] - The Group has 68 suppliers, with 59% from Hong Kong and 10% from mainland China[90][91] - The Group regularly donates food to local food assistance organizations, with approximately 2.8 tonnes of fruits and vegetables donated during the reporting period[103] Biographical Details of Directors and Senior Management This section provides detailed biographical information for the company's executive directors, non-executive directors, independent non-executive directors, and senior management, including their age, position, responsibilities, industry experience, and educational background - This section provides detailed biographical information for the company's executive directors, non-executive directors, independent non-executive directors, and senior management, including their age, position, responsibilities, industry experience, and educational background[110][111][112][115][116][117] Corporate Governance Report Corporate Governance Practices and the Board The company is committed to high corporate governance standards, adhering to the Listing Rules' Corporate Governance Code, with a six-member Board comprising two executive, one non-executive, and three independent non-executive directors, ensuring a balance of power by separating Chairman and CEO roles, and all directors engaging in continuous professional development - The Board believes the company has complied with the code provisions of the Corporate Governance Code throughout the year[119] - The Board comprises six directors, including three independent non-executive directors, exceeding one-third of the Board members, in compliance with Listing Rules requirements[122] - The roles of Chairman (Mr. Liu Tsz Ching) and Chief Executive Officer (Ms. Wu Shuk Kwan) are distinct and not held by the same individual, ensuring a balance of power[126] Board Committees The Board has established a Remuneration Committee, Nomination Committee, and Audit Committee to oversee specific areas, with the Remuneration Committee advising on compensation, the Nomination Committee reviewing Board composition and recommending new directors, and the Audit Committee reviewing financial information, internal controls, and risk management systems, all of which held meetings during the reporting period - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial reporting, internal controls, and risk management systems, and has reviewed the consolidated financial statements for the year[136] - The Nomination Committee is responsible for reviewing Board composition and diversity, and recommending director candidates based on the nomination policy[132][133] - The Remuneration Committee is responsible for recommending to the Board the remuneration policy and structure for Directors and senior management[131] Risk Management and Internal Control The Group maintains effective internal control and risk management systems to safeguard shareholder investments and assets, with the Board annually reviewing their effectiveness, and an independent consultant's review confirming the systems' efficacy and sufficiency, while the need for an internal audit function is annually assessed by the Audit Committee and Board - The Board confirms its overall responsibility for overseeing the company's internal control, financial control, and risk management systems, conducting an effectiveness review at least annually[142] - The Audit Committee has reviewed the internal control review report issued by an independent consulting firm and considers the Group's risk management and internal control systems to be effective and sufficient for the year[143] Directors' Report Principal Activities and Dividends The company's principal activity is investment holding, with the Group primarily engaged in food processing and supplying vegetables and fruits in Hong Kong, and no significant change in business nature, while the Board does not recommend a final dividend for the year ended March 31, 2021, considering the year's performance - The Group's principal business involves supplying over 1,300 types of food ingredients to more than 480 customer outlets in Hong Kong, with a focus on vegetables and fruits[149] - The Board does not recommend the payment of a final dividend for the year ended March 31, 2021[152] Major Customers and Suppliers This year, the Group experienced high customer and supplier concentration, with the largest customer accounting for 10.3% of total revenue and the top five customers for 35.5%, while the largest supplier accounted for 53.0% of total purchases and the top five suppliers for 76.2% Customer and Supplier Concentration | Concentration Indicator | % of Total (FY2021) | % of Total (FY2020) | | :--- | :--- | :--- | | Largest Customer as % of Total Revenue | 10.3% | 8.5% | | Top Five Customers as % of Total Revenue | 35.5% | 37.1% | | Largest Supplier as % of Total Purchases | 53.0% | 48.5% | | Top Five Suppliers as % of Total Purchases | 76.2% | 68.5% | Directors' and Shareholders' Interests The report details the interests of directors and chief executives in the company's shares, with founder and Chairman Mr. Liu Tsz Ching holding 57.14% through Classic Line Holdings Limited as the controlling shareholder, and his spouse Ms. Wu Shuk Kwan deemed to have the same interest, with no other major shareholders holding 10% or more Major Shareholder Holdings (as of March 31, 2021) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Concerned | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Liu Tsz Ching | Interest in controlled corporation | 720,000,000 | 57.14% | | Ms. Wu Shuk Kwan | Spouse's interest | 720,000,000 | 57.14% | | Classic Line Holdings Limited | Beneficial owner | 720,000,000 | 57.14% | Financial Summary This section provides a five-year summary of the Group's financial performance, assets, and liabilities, showing a decline in revenue and a shift from profit to loss in recent years, alongside fluctuations in total assets and liabilities Summary of Results, Assets and Liabilities for the Past Five Financial Years (HK$ thousands) | Year Ended March 31 | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 106,706 | 154,078 | 185,939 | 176,841 | 166,300 | | Gross Profit | 13,248 | 19,225 | 43,955 | 44,590 | 35,074 | | (Loss)/Profit Before Income Tax | (8,560) | (3,572) | 20,353 | 27,523 | 6,696 | | (Loss)/Profit for the Year | (8,244) | (4,746) | 16,059 | 22,861 | 3,410 | | Total Assets | 145,582 | 160,503 | 150,736 | 130,688 | 112,911 | | Total Liabilities | 52,311 | 58,988 | 39,675 | 35,653 | 40,737 | Independent Auditor's Report PricewaterhouseCoopers issued an unmodified opinion on the Group's consolidated financial statements, affirming their fair presentation of the Group's financial position and performance in compliance with accounting standards and regulations, while highlighting "Impairment testing of trade receivables" as a key audit matter due to significant management judgment - Auditor PricewaterhouseCoopers issued an unmodified opinion on the Group's consolidated financial statements, affirming they present a true and fair view of the Group's financial position and performance, and are properly prepared in compliance with relevant accounting standards and regulations[189] - A key audit matter identified was "Impairment testing of trade receivables" due to significant management judgment and estimation involved, particularly in the application of the expected credit loss model, which received focused attention from the auditor[192][193] Consolidated Financial Statements Consolidated Statement of Comprehensive Income This year, the Group's revenue significantly decreased to HK$106,706 thousand from HK$154,078 thousand, leading to an expanded operating loss of HK$7,700 thousand due to lower revenue and increased impairment losses on trade receivables, resulting in a loss attributable to equity holders of HK$8,240 thousand and a basic loss per share of HK$0.65 cents Summary of Consolidated Statement of Comprehensive Income (HK$ thousands) | Indicator | FY2021 | FY2020 | | :--- | :--- | :--- | | Revenue | 106,706 | 154,078 | | Gross Profit | 13,248 | 19,225 | | Operating Loss | (7,700) | (2,864) | | Loss Before Income Tax | (8,560) | (3,572) | | Loss and Total Comprehensive Expense for the Year | (8,244) | (4,746) | | Basic and Diluted Loss Per Share (HK cents) | (0.65) | (0.37) | Consolidated Statement of Financial Position As of March 31, 2021, the Group's total assets decreased to HK$145,582 thousand from HK$160,503 thousand, primarily due to reduced trade receivables, while total liabilities decreased from HK$58,988 thousand to HK$52,311 thousand, with total equity at HK$93,271 thousand Summary of Consolidated Statement of Financial Position (HK$ thousands) | Indicator | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 79,790 | 83,105 | | Current Assets | 65,792 | 77,398 | | Total Assets | 145,582 | 160,503 | | Equity and Liabilities | | | | Total Equity | 93,271 | 101,515 | | Non-current Liabilities | 1,708 | 2,379 | | Current Liabilities | 50,603 | 56,609 | | Total Liabilities | 52,311 | 58,988 | | Total Equity and Liabilities | 145,582 | 160,503 | Consolidated Statement of Cash Flows This year, the Group generated a net cash inflow from operating activities of HK$11,464 thousand, a significant improvement from the prior year's net outflow of HK$5,414 thousand, with net cash outflows from investing activities of HK$1,632 thousand and financing activities of HK$5,160 thousand, primarily for bank loan repayments, increasing year-end cash and cash equivalents to HK$37,431 thousand Summary of Consolidated Statement of Cash Flows (HK$ thousands) | Indicator | FY2021 | FY2020 | | :--- | :--- | :--- | | Net Cash From/(Used In) Operating Activities | 11,464 | (5,414) | | Net Cash Used In Investing Activities | (1,632) | (3,555) | | Net Cash (Used In)/From Financing Activities | (5,160) | 17,026 | | Net Increase in Cash and Cash Equivalents | 4,672 | 8,057 | | Cash and Cash Equivalents at Year End | 37,431 | 32,759 | Notes to the Consolidated Financial Statements Note 3 Financial Risk Management This note details the Group's primary financial risks, including credit, liquidity, and interest rate risks, with credit risk stemming from trade receivables and high customer concentration, where impairment provisions significantly increased this year, while liquidity risk is managed by maintaining sufficient cash and credit lines, and the gearing ratio stands at 47% - The Group applies a simplified approach to measure expected credit losses for trade receivables, with a significant increase in loss allowance to HK$6,160 thousand as of March 31, 2021, from HK$548 thousand in the prior year[262][264] - The Group's gearing ratio (total debt/total equity) was 47% as of March 31, 2021, a slight decrease from 48% in the previous year[273] Note 5 Segment Information Based on internal reports to the chief operating decision maker, the Group operates a single segment: procuring, processing, and supplying food ingredients in Hong Kong, with revenue from a single largest customer (Customer A) accounting for 10.3% of total revenue this year - The Group operates a single business segment, which involves procuring, processing, and supplying food ingredients in Hong Kong[279] - During the year, revenue from Customer A amounted to HK$10,966 thousand, representing over 10% of the Group's total revenue[280] Note 18 Trade Receivables At the reporting period end, total trade receivables were HK$25,907 thousand, with a net book value of HK$19,747 thousand after deducting a loss allowance of HK$6,160 thousand, and the aging analysis indicates a significant portion of receivables, HK$9,869 thousand, were over 120 days past due Aging Analysis of Trade Receivables (Gross, HK$ thousands) | Aging | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | 1 to 30 days | 9,220 | 7,787 | | 31 to 60 days | 3,991 | 4,598 | | 61 to 90 days | 1,538 | 5,300 | | 91 to 120 days | 1,289 | 2,876 | | Over 120 days | 9,869 | 11,889 | | Total | 25,907 | 32,450 |