Financial Performance - For the fiscal year ending March 31, 2020, the group recorded a loss of approximately HKD 31.5 million, compared to a profit of approximately HKD 3.3 million for the previous year[11]. - Revenue decreased by approximately 8.1% to about HKD 223.5 million, down from HKD 243.2 million in the previous year[11]. - Gross profit decreased by approximately 4.9% to about HKD 42.5 million, compared to HKD 44.7 million in the previous year[11]. - The group's revenue for the year ended March 31, 2020, was approximately HKD 223.5 million, a decrease of about 8.1% from HKD 243.2 million in 2019, primarily due to a 35.3% drop in plywood product sales[23]. - Plywood sales volume decreased by approximately 29.0% from about 66,500 cubic meters for the year ended March 31, 2019, to about 47,240 cubic meters for the year ended March 31, 2020[21]. - The average gross profit margin increased by approximately 0.6% to about 19.0% for the year ended March 31, 2020, compared to 18.4% in 2019, driven by higher-margin wood products[24]. - The company reported a loss attributable to equity shareholders of HKD 31,505,000, a significant decline from a profit of HKD 3,344,000 in the previous year[183]. - Total assets decreased to HKD 387,931,000 in 2020 from HKD 428,224,000 in 2019, reflecting a decline of 9.4%[186]. - Net asset value dropped to HKD 51,971,000 in 2020, down from HKD 88,342,000 in 2019, indicating a decline of 41.2%[186]. - The company incurred financing costs of HKD 11,116,000, which increased significantly from HKD 3,467,000 in 2019[183]. - The basic and diluted loss per share was HKD 14.40, compared to earnings of HKD 1.53 per share in the previous year[183]. - The company reported a loss before tax of HKD 31,858,000 for the year 2020, compared to a profit of HKD 6,357,000 in 2019[190]. Expenses and Costs - Sales expenses decreased by approximately 26.0% to about HKD 5.4 million, down from HKD 7.3 million in the previous year[11]. - Administrative expenses increased by approximately 23.9% to about HKD 40.4 million, compared to HKD 32.6 million in the previous year[11]. - Administrative expenses increased by approximately HKD 7.8 million to about HKD 40.4 million for the year ended March 31, 2020, due to the consolidation of Hebei Youlin's administrative expenses[28]. - Depreciation expenses increased significantly to HKD 10,297,000 for property, plant, and equipment in 2020, up from HKD 2,994,000 in 2019[190]. Corporate Governance - The company has adhered to the corporate governance code as stipulated in the GEM listing rules for the year ending March 31, 2020[54]. - The board is committed to maintaining high levels of corporate governance while striving to create value for shareholders and achieve maximum returns[53]. - The company has implemented a standard code for regulating securities transactions by directors, in compliance with GEM listing rules[55]. - The company aims to enhance its internal control systems and improve corporate governance practices continuously[53]. - The board consists of six directors, including two executive directors, one non-executive director, and three independent non-executive directors[57]. - The board held four meetings during the year ending March 31, 2020, with all directors attending all meetings[60]. - The audit committee, composed of three independent non-executive directors, held four meetings and reviewed the annual performance and financial statements for the year ending March 31, 2020[72]. - The company is committed to a board diversity policy, ensuring a balance of skills, experience, and perspectives among board members[66]. - The chairman and CEO roles are separated, with the chairman focusing on overall strategy and the CEO managing daily operations[65]. - The company will continue to ensure that all board appointments are based on merit while considering diversity factors[66]. - The Nomination Committee held one meeting during the year ending March 31, 2020, with all members present[74]. - The company has adopted a nomination policy to enhance the transparency and reliability of the selection of directors[75]. - The Remuneration Committee also held one meeting during the year ending March 31, 2020, with all members present[83]. - The company has established a dividend policy that allows for the declaration of dividends based on the company's profits and reserves[87]. - The company will regularly review and reassess the effectiveness of its dividend policy[91]. - The company has arranged suitable insurance coverage for directors and senior officers against legal liabilities arising from corporate activities[86]. - The board of directors is responsible for ensuring that the consolidated financial statements are prepared in accordance with applicable statutory requirements and accounting standards[93]. - The company has implemented a robust internal control system to ensure effective operation in operational, financial, and compliance areas[96]. - The company has adopted a whistleblowing policy to encourage reporting of misconduct and enhance corporate governance standards[106]. - The company maintains effective communication with the investment community to enhance transparency and understanding of its business and developments[109]. - The board and audit committee systematically review the internal control and risk management functions, identifying areas for improvement[101]. - The company has established a formal mechanism for risk assessment and management, overseen by the compliance officer[102]. - The independent non-executive directors confirmed their independence as per the GEM Listing Rules, and all were deemed independent as of the report date[144]. Market Expansion and Strategy - The group aims to diversify its product range and expand into the Chinese market, particularly in the North China region, driven by favorable government policies[14]. - The acquisition of Hebei Youlin Technology Co., Ltd. is expected to provide a new growth point for the group by expanding its business into North China[14]. - The group is seeking business opportunities in potential markets outside of China to expand its customer base[15]. - Several trade subsidiaries have obtained Forest Stewardship Council (FSC) certification to participate in the FSC product trade chain[15]. - The group has obtained FSC certification for several trading subsidiaries to participate in the trade of FSC-certified plywood products, which is crucial for entering environmentally conscious markets[21]. - The company’s factories in China temporarily shut down for about one month due to COVID-19, resuming normal operations by the end of March 2020[192]. - The company has not identified any significant adverse effects on its financial statements due to COVID-19, aside from the temporary factory shutdown[192]. Financial Position and Assets - Cash and cash equivalents were approximately HKD 11.2 million as of March 31, 2020, down from HKD 14.0 million as of March 31, 2019[29]. - The group's total bank and other borrowings amounted to approximately HKD 133.6 million as of March 31, 2020, compared to HKD 175.6 million as of March 31, 2019[29]. - The debt-to-asset ratio increased to approximately 86.6% as of March 31, 2020, from 79.4% as of March 31, 2019, primarily due to impairments on property, plant, and equipment[30]. - The carrying amounts of property, plant, and equipment were HKD 219,222,000, with accumulated impairment losses of HKD 14,613,000[172]. - The carrying amount of right-of-use assets was HKD 60,481,000, with accumulated impairment losses of HKD 3,590,000[172]. - Impairment losses recognized during the fiscal year for property, plant, and equipment and right-of-use assets amounted to HKD 11,663,000 and HKD 3,590,000, respectively[172]. - The financial statements have been prepared in accordance with the Hong Kong Financial Reporting Standards and reflect the group's financial position as of March 31, 2020[168]. - The audit was conducted under the Hong Kong Auditing Standards, ensuring the independence of the auditors from the group[169]. - The group reported signs of impairment for operations in China and Hong Kong, which recorded minimal profits or losses during the fiscal year[172]. - The management's assessment of impairment involved significant assumptions and judgments regarding recoverable amounts[172]. Shareholder Information - As of May 21, 2020, approximately 1.27% of the company's issued share capital, totaling 2,782,000 shares, was sold by Guotai Junan Securities due to a margin call failure[55]. - As of March 31, 2020, the company had a total of 218,733,333 issued shares, with Ms. Sun Xuesong holding 123,041,695 shares (56.25%) and Mr. Xue Zhaoqiang holding 30,760,425 shares (14.06%)[146]. - The company did not engage in any purchases, sales, or redemptions of its listed securities during the fiscal year ending March 31, 2020[148]. - There were no outstanding stock options granted under the stock option plan as of March 31, 2020, and no stock options were granted during the fiscal year[160]. - The stock option plan allows for a maximum of 20,000,000 shares to be issued, representing approximately 9.14% of the issued shares as of the report date[154]. - The company confirmed compliance with the disclosure requirements under the GEM Listing Rules regarding related party transactions[142]. - There were no related party transactions that required disclosure beyond what was already reported[142]. - The company has not entered into any management contracts for the fiscal year ending March 31, 2020, except for employment contracts[145]. - The company appointed Mr. Chen Yuxiao as the company secretary on September 5, 2016, who is responsible for ensuring effective communication among board members and compliance with board policies[92].
骏东控股(08277) - 2020 - 年度财报