Business Operations and Competition - The Group faced significant competition and increasing contract costs, impacting its business operations, particularly in fitting out services[18]. - The Group is actively exploring new business and investment opportunities to diversify its principal activities and broaden its revenue base[25]. - The Group is focusing on effectively utilizing its resources to engage in current business sectors while exploring new business opportunities[25]. Financial Performance - The total revenue for the year ended March 31, 2019, was approximately HK$28.2 million, representing a decrease of HK$4.9 million or 14.9% compared to HK$33.1 million in 2018, primarily due to a decline in revenue from the sourcing and merchandising of fine and rare wines[35]. - Revenue from the fitting out and engineering services segment and design and procurement of furnishings and related products services increased from approximately HK$14.8 million in 2018 to approximately HK$19.0 million in 2019, attributed to an increase in the number of projects executed and engagement in waterproofing projects through a newly acquired subsidiary[36]. - The Group recorded a gross profit of approximately HK$7.6 million for the year ended March 31, 2019, with an overall gross profit margin of approximately 27.2%, compared to a gross profit of approximately HK$3.4 million and a margin of approximately 10.3% in 2018[41]. - The overall gross profit for the year ended 31 March 2019 was approximately HK$7.6 million, an increase of approximately HK$4.2 million or 124.2% from HK$3.4 million in the previous year[45]. - The gross profit margin improved to 27.2% for the year ended 31 March 2019, compared to 10.3% in the previous year[44]. - The loss for the year ended 31 March 2019 was approximately HK$20.1 million, a decrease of approximately HK$8.0 million or 28.5% from HK$28.1 million in the previous year[47]. - Administrative expenses decreased by approximately HK$2.6 million or 7.4% from HK$34.7 million to HK$32.1 million for the year ended 31 March 2019[46]. Revenue Breakdown - Revenue from the sourcing and merchandising of fine and rare wines significantly decreased from approximately HK$13.8 million in 2018 to approximately HK$5.8 million in 2019 due to staff turnover in the sales team during the third quarter[37]. - The Group's revenue from Hong Kong was HK$24.5 million in 2019, down from HK$33.1 million in 2018, while revenue from Malaysia and the PRC was HK$2.6 million and HK$1.0 million, respectively, in 2019[35]. - The sourcing and merchandising of fine and rare wines generated total revenue of approximately HK$5.8 million during the year, a decrease from HK$13.8 million in the previous year[62]. - The wine merchandising business generated total revenue of approximately HK$5.8 million, a significant decrease from HK$13.8 million in the previous year[67]. Acquisitions and Business Expansion - The Group completed an acquisition of a Hong Kong company in the waterproofing and maintenance business, expanding its services into fitting out and engineering[19]. - The Group has completed the acquisition of a company engaged in waterproofing engineering and maintenance, expanding its design and fitting out services into engineering services[22]. - The Group acquired a Hong Kong company engaged in waterproofing works and maintenance services in December 2018 to expand its fitting out and engineering services business[52]. - The Group is developing a new business in leasing construction equipment, aiming for growth from its fitting out and engineering services[19]. - The Group entered into a master agreement for the purchase of scaffolding equipment totaling approximately HK$20 million, enhancing its leasing business[71]. - The Group entered into a master agreement for scaffolding equipment amounting to approximately HK$20 million, which will be leased to construction companies[98]. Management and Governance - The Company has established an audit committee, a remuneration committee, a nomination committee, and a compliance committee in accordance with GEM Listing Rules[153]. - The Company has complied with the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules during the year ended March 31, 2019[153]. - The principal function of the Board is to consider and approve the overall business plans and strategies of the Group[160]. - The management provided all members of the Board with monthly updates in accordance with the code provision C.1.2 of the CG Code[160]. - The Company has adopted a code of conduct for dealing in securities of the Company by the Directors[154]. - The Board meetings can be attended in person or through electronic communication means[161]. - The Company has a professional management team led by senior management with substantial experience and expertise in the Group's business[160]. - The Board held 12 Board meetings and 1 general meeting during the year, with all executive directors attending all meetings[166]. - Each executive director has entered into a service contract for an initial term of two or three years, subject to re-election[169]. - The Company has three independent non-executive directors, with one possessing appropriate professional qualifications in accounting or related financial management[173]. - The roles of the chairman and the chief executive officer are separated, with Mr. Chan Chi Yuen as Chairman and Mr. Liu Rongsheng as CEO[177]. - The Board delegates day-to-day operations to executive directors and management, reserving key strategic decisions for its approval[178]. - All directors participated in continuous professional development to ensure their contributions remain informed and relevant[181]. - The Company provides comprehensive induction for newly appointed directors to ensure understanding of business operations and responsibilities[180]. - The Board may appoint additional directors or fill casual vacancies, with such appointments subject to re-election at the next general meeting[171]. - One-third of the directors must retire by rotation at each annual general meeting, but are eligible for re-election[172]. - The Company has complied with the corporate governance code provisions regarding the separation of roles and director independence[177][173]. Audit and Remuneration - The Audit Committee held 5 meetings during the year to review the Group's financial reporting process and internal control systems[188]. - The Group's audited consolidated results for the year ended 31 March 2019 were reviewed, with significant discussions on financial matters[188]. - The Remuneration Committee conducted 3 meetings to review the remuneration packages of all Directors[198]. - The Group's remuneration policies are based on individual performance and are reviewed regularly, with discretionary bonuses linked to profitability[200]. - The Audit Committee recommended the re-appointment of Reanda Lau & Au Yeung (HK) CPA Limited as the external auditor for the financial year ending 31 March 2020[193]. - The Company has arranged appropriate insurance covering liabilities against Directors in compliance with the Corporate Governance Code[186]. - The Remuneration Committee comprises three independent non-executive Directors, chaired by Mr. Lam Cheok Va[194]. - The Audit Committee reviewed the effectiveness of the Group's financial controls and risk management systems[197]. Employee and Operational Changes - The sales team for sourcing and merchandising fine and rare wines experienced a turnover, but the Group successfully restructured operations and reactivated the business[20]. - The marketing wine business faced challenges due to staff turnover but has been restructured and reactivated in the last quarter of the year[37]. - The Group employed 30 employees as of March 31, 2019, down from 38 in 2018[109]. - Total remuneration for the year ended March 31, 2019, was approximately HK$17.1 million, a slight increase from HK$16.9 million in 2018[110]. Financial Position and Assets - As of March 31, 2019, the Group had net current assets of approximately HK$50.6 million, down from HK$64.3 million in 2018[78]. - The current ratio was approximately 7.5 times as of March 31, 2019, showing no significant change from 7.4 times in 2018[79]. - Total equity attributable to owners of the Company amounted to approximately HK$104.4 million as of March 31, 2019, compared to approximately HK$110.8 million in 2018[80]. - The Group had no borrowings as of March 31, 2019, a decrease from a gearing ratio of 6.12% in 2018 due to full repayment of obligations[81]. - As of March 31, 2019, the Group had no assets pledged to banks for securing borrowings, compared to HK$25 million in investment property and HK$0.3 million in bank deposits in 2018[96]. Risk Management and Compliance - The Group's financial condition is subject to risks including economic slowdown and increased market competition[117]. - The Group does not hedge against foreign exchange exposure and will monitor exchange rate movements to mitigate risks[95]. - The Group is committed to environmental conservation and will periodically review its environmental practices[118].
中新控股(08125) - 2019 - 年度财报