Financial Performance - For the year ended June 30, 2019, the Group's revenue was approximately HK$95.3 million, representing a 33.3% increase from HK$71.5 million in the previous year[13]. - The gross profit for the same period was approximately HK$31.3 million, reflecting a 55.0% increase compared to HK$20.2 million in the prior year[13]. - The Group recorded a net loss of approximately HK$9.6 million, a significant improvement of 58.1% from a net loss of approximately HK$22.9 million in the previous year[13]. - Total assets decreased by 10.0% to HK$61.7 million from HK$68.5 million[13]. - Total equity declined by 20.5% to HK$36.4 million from HK$45.8 million[13]. - The gross profit margin improved to 32.8% from 28.2% in the previous year[13]. - The improvement in gross profit margin rose from approximately 28.2% in 2018 to approximately 32.8% in 2019, attributed to higher sales of millwork, furniture, and facade fabrication[84]. - The net loss for the year decreased to approximately HK$9.6 million, a reduction of approximately 58.1% from HK$22.9 million in 2018[82]. - The direct cost increased by approximately 24.7% from approximately HK$51.4 million in 2018 to approximately HK$64.1 million in 2019, representing approximately 67.2% of revenue in 2019[99]. - Revenue from the five largest brands accounted for approximately 88.6% of total revenue in 2019, increasing from approximately 66.6% in 2018[98]. - Interior solutions services revenue decreased to approximately HK$13.3 million in 2019 from approximately HK$27.2 million in 2018 due to the completion of major projects[90]. Business Strategy and Expansion - The Group plans to focus on bespoke interior design solutions and expand into the mid to high-end residential market, leveraging its experience in the fit-out business[18][19]. - The Group is actively seeking potential acquisition targets with solid financial performance to support strategic growth[20]. - The Group aims to diversify its business and establish a strong recurring income base for sustainable development[19]. - The group will continue to focus on providing customized and comprehensive interior design solutions, as well as the supply of metal, glass, wooden products, and furniture manufacturing[24]. - The group is actively seeking potential opportunities to provide metal, glass, and wooden products and furniture to high-end fashion, hotel, and beauty brands, particularly in the European market, with satisfactory negotiation progress[24]. - The Group has been expanding its business into China, the United States, Europe, the Middle East, and other Asian countries since its establishment in 1999[81]. - The increase in revenue and gross profit was primarily due to the implementation of previously delayed business strategies related to renovations and new shop rollouts for major customers[83]. - The Group's business strategies included the renovation and new shop rollout of certain major customers during the year[83]. - The Group is focusing on expanding interior solutions services to the mid to high-end residential market in Hong Kong[91]. - The Group is actively seeking potential acquisition targets to enhance strategic growth and synergy with existing business[91]. Management and Governance - Mr. Lau has over 25 years of experience in accounting, auditing, and corporate finance, currently serving as the Chief Financial Officer since January 2016[43]. - Mr. Leung has over 20 years of experience in sales and business development, currently serving as Project Director (Business Development) since March 2016[45]. - Mr. So has over 25 years of experience in finance across multiple regions including Hong Kong and Japan, appointed as an independent non-executive Director since August 2016[52]. - The Group's financial management is overseen by Mr. Lau, who is also the company secretary and a member of the Risk Management Committee[43]. - The Group has a focus on client liaison and business development, led by Mr. Leung, who is responsible for managing customer relationships[45]. - The Group's executive team includes members with extensive backgrounds in finance and business development, enhancing strategic decision-making capabilities[43][45][52]. - The Group's governance structure includes various committees such as the Audit Committee and the Remuneration Committee, chaired by Mr. So[52]. - The company has a strong governance structure with independent non-executive directors overseeing key committees such as Audit, Remuneration, and Risk Management[59]. - The company emphasizes strategic planning in developing new hotel products and enhancing procurement performance[61]. - The management team includes experienced professionals with backgrounds in finance, project management, and procurement, ensuring effective operational oversight[68]. - The company is committed to maintaining high standards of corporate governance and ethical practices across its operations[63]. - The board comprises members with diverse expertise, contributing to informed decision-making and risk management[59]. Use of Proceeds and Financial Commitments - The Company raised net proceeds of approximately HK$64.6 million from the share offer, with 600,000,000 shares issued at HK$0.15 each[141]. - Approximately 30% of the net proceeds (HK$19.3 million) was initially planned for acquisitions and partnerships, but HK$6.1 million (9.4% of net proceeds) was reallocated to expand interior solutions services[142]. - The Board reallocated HK$10.6 million of net proceeds, originally for an overseas R&D center, to establish a new R&D center in Hong Kong, with an acquisition of a property for HK$8.5 million[143]. - As of June 30, 2019, HK$33.2 million of the net proceeds had been utilized, leaving HK$31.4 million unutilized[149]. - The Company plans to continue using the net proceeds in line with the stated purposes in the Prospectus, while evaluating business objectives[144]. - The unutilized net proceeds have been placed as interest deposits with licensed banks in Hong Kong[152]. - The acquisition related to the new R&D center was completed on July 18, 2019[153]. - The Company has utilized HK$9.9 million for additional working capital and other general corporate purposes[149]. - The expansion of interior solutions services to the mid to high-end residential market received HK$6.1 million in revised allocation[149]. - The Company will issue further announcements if there are changes in the use of net proceeds from those stated in the Prospectus[152]. - The company plans to utilize approximately HK$6.6 million of unutilized net proceeds for settling operating expenses of overseas subsidiaries by June 30, 2021[157]. - Approximately HK$9.0 million of unutilized net proceeds is allocated for establishing an R&D center in Hong Kong, with HK$7.7 million already utilized and HK$1.3 million expected to be gradually used for R&D works[157]. - The expansion of interior solutions services to the mid to high-end residential market is planned with an allocation of approximately HK$6.0 million, expected to be utilized within two years after establishing an office show flat[157]. Corporate Governance and Board Structure - The board comprises six members, including three executive directors and three independent non-executive directors as of June 30, 2019[168]. - The company has complied with the requirement of having at least three independent non-executive directors, although there was a temporary non-compliance due to the passing of an independent director[169]. - The roles of the chairman and the chief executive officer are performed by the same individual, which deviates from the CG Code provision A.2.1[171]. - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee to oversee specific aspects of its affairs[161]. - The company has been in compliance with the Corporate Governance Code during the year, except for the noted deviation regarding the chairman and CEO roles[159]. - The company aims to enhance corporate value and accountability through high standards of corporate governance practices[158]. - The Board held six meetings during the year and passed resolutions by written resolutions[180]. - The Chairman and Chief Executive Officer roles are held by Mr. Lee, which the Board believes provides strong and consistent leadership[176]. - The company intends to hold board meetings at least four times a year, approximately at quarterly intervals[177]. - The attendance of Board members at the 2018 annual general meeting is documented in the report[186]. - The Board will continue to review the appropriateness of splitting the roles of Chairman and Chief Executive Officer[176]. - Notices for regular board meetings are given at least fourteen days in advance[177]. - The agenda and documents for meetings are sent to directors at least five days prior to the meetings[178]. - The company has a balanced composition of executive and independent non-executive directors to ensure a balance of power[176]. - The Audit Committee held three meetings during the year, with all members present either in person or via telephone[194]. - The Company reviewed the Group's annual financial results for the year ended June 30, 2018, and interim financial results for the six months ended December 31, 2018[197]. - The Remuneration Committee is responsible for determining policies related to human resources management and reviewing the Company's remuneration policies[200]. - The Audit Committee assessed the independence of the Company's auditor and discussed the audit plan for the year ended June 30, 2019[197]. - The Company has three independent non-executive Directors on the Audit Committee, ensuring compliance with the CG Code[192]. - The Remuneration Committee consists of three members, including two independent non-executive Directors and one executive Director[199]. - The Audit Committee has access to independent professional advice and sufficient resources to perform its duties[193]. - The Company reviewed significant issues on financial reporting and internal control during the year ended June 30, 2018[197]. - The Remuneration Committee determines remuneration packages for Directors and senior management members of the Company[200]. - The Company established the Audit Committee on August 22, 2016, in compliance with the CG Code[192].
易纬集团(03893) - 2019 - 年度财报