Financial Performance - For the fiscal year ending March 31, 2020, the company's revenue decreased by approximately 19.6% to about HKD 185.7 million from approximately HKD 230.8 million in the previous fiscal year[12]. - The OEM production business revenue fell by approximately 25.5% to about HKD 120.2 million, down from approximately HKD 161.3 million in the previous fiscal year[12]. - The original brand production business revenue decreased by approximately 5.9% to about HKD 65.5 million, compared to approximately HKD 69.5 million in the previous fiscal year[12]. - Gross profit for the fiscal year 2020 was approximately HKD 69.1 million, a decrease of about HKD 23.0 million or 25.0% from HKD 92.1 million in 2019, resulting in a gross margin decline from 39.9% to 37.2%[13]. - The group recorded a pre-tax loss of approximately HKD 59.2 million in fiscal year 2020, worsening by about HKD 40.3 million from a loss of HKD 18.9 million in 2019, attributed to decreased revenue and inventory write-downs[19]. - Financing costs increased by approximately 71.3% or HKD 2.6 million to about HKD 6.1 million in fiscal year 2020, compared to HKD 3.6 million in 2019[18]. - The group’s cost of sales decreased by approximately HKD 138.7 million, or 15.9%, to about HKD 116.6 million in the fiscal year 2020 compared to 2019[13]. - Inventory write-downs amounted to HKD 9.5 million in fiscal year 2020, compared to HKD 1.3 million in 2019, due to provisions for obsolete and slow-moving inventory[14]. Challenges and Strategic Responses - The company faced significant challenges due to the ongoing US-China trade war, Brexit uncertainties, and the impact of COVID-19 on global supply chains and demand[7]. - The ongoing global economic uncertainty is expected to continue affecting production, demand, and retail operations in the foreseeable future[8]. - The company plans to reduce physical retail stores in Hong Kong and expand its online business in response to changing consumer behavior[8]. - Cost reduction measures will be implemented, including streamlining operations and reducing fixed costs through effective utilization of production facilities[8]. - The company aims to expand its business into children's and youth clothing while continuing to collaborate with developed clients[8]. - The company has gathered valuable data from its operations in China to mitigate the impacts of social unrest in Hong Kong[8]. - The outlook for the next fiscal year remains challenging due to the ongoing impact of the COVID-19 pandemic and geopolitical tensions affecting the global economy[20]. Corporate Governance - The company is committed to good corporate governance to enhance shareholder value and accountability[49]. - The executive team includes members with extensive backgrounds in finance, accounting, and risk management, ensuring robust oversight[43][47]. - The board comprises independent non-executive directors who provide independent judgment and oversight[45][46][47]. - The company has implemented strategies to mitigate liquidity risks and improve cash flow management[42]. - The board is responsible for overseeing the management and overall performance of the group, ensuring necessary financial and human resources are in place[52]. - The company encourages all directors to participate in relevant training courses, with costs covered by the company[62]. - The company has received written confirmations of independence from all current independent non-executive directors, affirming their compliance with GEM Listing Rules[57]. - The board is scheduled to hold four meetings annually, approximately once per quarter, with agendas and documents provided in advance[63]. - The company regularly reviews its corporate governance practices to ensure compliance with applicable codes[50]. - The independent non-executive directors contribute extensive operational and financial expertise to the board[57]. - The company has appointed new independent non-executive directors to meet GEM Listing Rules requirements following previous resignations[56]. - The board of directors held meetings in the 2020 fiscal year, with attendance rates for various committees being 100% for executive directors and independent non-executive directors[65]. - The audit committee held four meetings during the fiscal year to review the audited annual results for the fiscal year 2019 and the unaudited quarterly results[78]. - The company has adopted a board diversity policy, emphasizing the importance of diverse perspectives in board appointments, including gender, age, and professional experience[70]. - The chairman and CEO roles are separated, with Mr. Zhang appointed as chairman on May 21, 2020, ensuring effective management and business development[71]. - The audit committee consists of three independent non-executive directors, with Mr. Chan serving as the chairman, ensuring oversight of financial reporting and compliance[75]. - The company is committed to maintaining good corporate governance and regularly reviews the need for separate individuals to fulfill the roles of chairman and CEO[71]. - The audit committee is responsible for monitoring the integrity of financial statements and ensuring the independence of external auditors[76]. - The company emphasizes the importance of risk management and internal control systems, with discussions held with management on these matters[76]. - The board has established three committees: audit, remuneration, and nomination, each with clear written terms of reference[72]. - The company is dedicated to ensuring compliance with corporate governance codes and regularly reviews its governance practices[73]. Shareholder and Financial Information - The company has adopted a dividend policy to allow shareholders to share in the company's profits while retaining sufficient funds for future growth[109]. - When determining dividend recommendations, the board considers factors such as retained earnings, capital expenditure needs, and overall economic conditions[114]. - The board decided not to recommend any dividend payment for the fiscal year 2020[120]. - The company has maintained a sufficient public float of at least 25% of issued shares, in compliance with GEM listing rules[130]. - The total number of issued shares as of March 31, 2020, is 461,476,000[159]. - As of March 31, 2020, the controlling shareholder, Joyful Cat, holds 300,000,000 shares, representing approximately 65.01% of the issued shares[158]. - The company had no redeemable securities during the fiscal year 2020, nor did it purchase or sell any listed securities[128]. - The company has not entered into any significant management contracts during the fiscal year 2020, aside from employment contracts for executive directors[153]. - The independent auditor has stated that there are no significant uncertainties that may cast doubt on the company's ability to continue as a going concern[95]. Environmental and Social Responsibility - The report period for the environmental, social, and governance report covers from April 1, 2019, to March 31, 2020[189]. - Total electricity consumption during the reporting period was 1,544,610 kWh, a decrease of approximately 15% compared to the previous year[197]. - The company implements a 4R strategy focusing on "Replace, Reduce, Reuse, and Recycle" to minimize resource consumption[196]. - The company adheres to various Chinese environmental protection laws, including the Environmental Protection Law and the Water Pollution Prevention Law[196]. - The company actively promotes energy-saving measures and raises employee awareness through internal communications and notices[197]. - The company recognizes the significant environmental impact of its operations and manages its water and electricity consumption accordingly[196]. - The company collaborates with supply chain partners to avoid waste and reduce overall resource usage[196]. - The company has established an internal environmental awareness program to encourage employees and customers to improve environmental performance[197]. - The company’s production operations do not significantly contribute to air, water, or land pollution as per Hong Kong and Chinese regulations[197]. - The company’s management views environmental protection as a key business focus and has developed internal policies to reduce environmental impact[195].
民信国际控股(08456) - 2020 - 年度财报