Financial Performance - For the fiscal year ending March 31, 2019, the company's revenue decreased by approximately 13.2% from about HKD 265.8 million in the previous fiscal year to about HKD 230.8 million[12]. - The revenue from the OEM production segment fell by about 11.0% to approximately HKD 161.3 million, down from about HKD 181.2 million in the previous fiscal year[12]. - The revenue from the original brand production segment decreased by approximately 17.8% to about HKD 69.5 million, down from about HKD 84.6 million in the previous fiscal year[12]. - The company's gross profit declined by approximately 29.3% to about HKD 92.1 million, compared to HKD 121.4 million in the previous fiscal year[13]. - The gross profit margin decreased from approximately 45.7% in the previous fiscal year to about 39.9% in the current fiscal year[13]. - The group recorded a pre-tax loss of approximately HKD 18.9 million in the fiscal year 2019, worsening by about HKD 17.6 million compared to a loss of HKD 1.3 million in 2018[15]. Market Expansion and Strategy - The company is expanding its product range from infant clothing to children's and youth clothing to capture more sales[9]. - A strategic partnership was established with Kidswant Children's Products Co., Ltd. in China, leading to the opening of ten retail stores for the company's brand Mides[9]. - The company is actively seeking more partners in the Chinese market to enhance sales revenue and reduce manufacturing costs[9]. - The sales team is working to diversify the customer base by acquiring new clients, with expectations for more stable orders in the coming year[11]. - The group plans to expand its product range from baby clothing to children's and youth clothing to increase sales in the future[17]. - The group opened ten retail stores in China through the Kid King channel in the fiscal year 2019 and expects to add another ten stores in the coming years to increase market share[17]. Financial Position and Liquidity - As of March 31, 2019, the group had cash and bank balances of approximately HKD 7.5 million, down from HKD 21.8 million on March 31, 2018[19]. - The group's interest-bearing bank borrowings were approximately HKD 69.6 million as of March 31, 2019, compared to HKD 50.2 million on March 31, 2018[19]. - The current ratio was 1.1 as of March 31, 2019, down from 1.4 on March 31, 2018, while the debt-to-equity ratio was approximately 130.2% compared to 58.5% in the previous year[19]. - The net proceeds from the share offering amounted to approximately HKD 44.0 million, with HKD 22.2 million utilized by March 31, 2019[26]. Corporate Governance - The company is committed to fulfilling its responsibilities to shareholders and enhancing shareholder value through good corporate governance practices[40]. - The company has adhered to the corporate governance code as per GEM Listing Rules Appendix 15 throughout the fiscal year ending March 31, 2019[41]. - All directors confirmed compliance with the trading regulations set forth in GEM Listing Rules during the fiscal year[42]. - The board consists of six directors, with independent non-executive directors making up 50% of the board[47]. - The company held a total of 3 board meetings, with attendance rates for executive directors ranging from 3/3 to 5/5[55]. - The company has established appropriate insurance arrangements for legal liabilities faced by directors[50]. - All independent non-executive directors have confirmed their independence in accordance with GEM listing rules[48]. - The company encourages directors to participate in training courses, with all directors having attended professional development sessions[52]. - The board is responsible for overseeing the management of the group's business and overall performance[43]. - The company has a structured onboarding process for new directors to ensure they understand their responsibilities[52]. Risk Management and Internal Controls - The company has established risk management and internal control policies, with the board responsible for overseeing their effectiveness[82]. - The board has no immediate need for an internal audit function, but will review this requirement periodically[83]. - The company has engaged an external consultant for annual audits of its internal control systems[82]. - The audit committee is tasked with reviewing the integrity of the company's financial statements and ensuring compliance with applicable standards[63]. Environmental and Social Responsibility - The company is committed to environmental and social responsibilities, with strict corporate governance policies in place[171]. - Stakeholder engagement is crucial for the company's strategy development, helping to reduce environmental impact and improve social interactions[175]. - The company operates both retail stores and wholesale sales in Hong Kong, China, and Macau, focusing on its own brand "mides" and third-party products[171]. - The company is committed to reducing energy consumption through a 4R strategy: Replace, Reduce, Reuse, and Recycle[181]. - The company has implemented measures to encourage energy-saving practices among employees, such as adjusting air conditioning to 25.5 degrees Celsius and turning off electronic devices during lunch breaks[187]. - The company adheres to various environmental protection laws in China, including the Environmental Protection Law and the Water Pollution Prevention Law[182]. Shareholder Matters - The company has adopted a shareholder communication policy to ensure equal and timely access to information, enabling shareholders to exercise their rights and participate actively in company affairs[95]. - The company has a process in place for shareholders to propose suggestions at the annual general meeting, requiring a written request to the board or company secretary[89]. - The company will verify the identity and shareholding of shareholders who submit requests for special meetings, ensuring proper governance[91]. - The board of directors approved a dividend policy on December 31, 2018, allowing shareholders to share in the company's profits while retaining sufficient funds for future growth[94]. - The company reported a distributable reserve of approximately HKD 6.2 million as of March 31, 2019[112]. - The company did not declare any dividends for the year[106]. Employee and Board Composition - The group employed approximately 892 employees as of March 31, 2019, down from 1,042 employees in 2018[27]. - The board has a balanced composition of executive and non-executive directors to ensure effective independent judgment[46]. - The chairman has held meetings with independent non-executive directors without the presence of other directors[49]. - The company has established a remuneration committee to review compensation policies and related matters[130]. Transactions and Share Options - The company has adopted a share option scheme as an incentive for selected participants[130]. - The total number of shares available for issuance under the share option scheme is capped at 40,000,000 shares, which represents 10% of the shares issued on the date of listing on GEM[154]. - Each participant in the share option scheme is limited to a maximum of 1% of the total issued shares within any 12-month period[155]. - The share option scheme will remain effective for a period of 10 years, from December 28, 2017, to December 27, 2027[156]. - No significant transactions or contracts involving directors and their related entities were reported during the year[131]. - No conflicts of interest were identified among directors or major shareholders in relation to the group's business[132].
民信国际控股(08456) - 2019 - 年度财报