Business Challenges - The Group faced significant challenges during the COVID-19 pandemic and the US-China trade war, impacting performance and demand for freight forwarding services [22]. - The global supply chain was disrupted due to the cancellation of scheduled passenger flights, affecting air cargo space availability for logistics services [22]. - The demand for the Group's services decreased and became less stable as manufacturers in the PRC restructured production lines due to additional tariffs imposed by the USA [23]. - The ongoing uncertainties from the trade war and pandemic are expected to continue affecting the Group's operations and financial performance in the next financial year [41]. - The Group faced challenges due to the Pandemic, Trade War, and ongoing protests, leading to uncertainties in the business environment for 2020 [113]. Financial Performance - The Group's gross profit significantly decreased during the year ended March 31, 2020, due to challenges from the US-China trade war and the global pandemic [32]. - The Group's financial performance was impacted by increased legal and compliance costs, professional fees, and rising purchase costs for air and sea cargo spaces [41]. - The Group recorded a loss before taxation of approximately HK$24.4 million for the Year, compared to a loss of approximately HK$15.5 million for the Previous Year, primarily due to increased costs in warehousing services and legal compliance [78][82]. - The Group's total revenue increased by approximately 9.3% from approximately HK$193.0 million for the previous year to approximately HK$211.0 million for the year [46]. - Revenue from air freight forwarding and related logistics services amounted to approximately HK$169.5 million, accounting for approximately 80.3% of total revenue, up from 78.9% in the previous year [47]. - Revenue from sea freight forwarding and related logistics services decreased significantly to approximately HK$8.4 million, accounting for approximately 4.0% of total revenue, down from 8.3% in the previous year [48]. - Revenue from warehousing and related value-added services increased to approximately HK$33.1 million, representing approximately 15.7% of total revenue, up from 12.8% in the previous year [54]. - The Group's cost of services increased by approximately 17.0% from approximately HK$166.2 million to approximately HK$194.4 million [55]. - Gross profit decreased by approximately 38.1% from approximately HK$26.8 million to approximately HK$16.6 million, with gross profit margin dropping from approximately 13.9% to approximately 7.9% [56]. - Administrative expenses increased to approximately HK$32.4 million from approximately HK$27.2 million, primarily due to increased legal and compliance costs and staff costs [65]. Strategic Initiatives - The Group established a new subsidiary in Shenzhen and a branch in Taipei to enhance freight forwarding and logistics services, aiming to expand its customer base in the Greater China region [24]. - The Group is committed to upgrading facilities to meet international and local regulatory requirements for its customers [25]. - The Group plans to implement cost control and expand service quality to cope with market challenges [113]. - The Group is exploring new business opportunities such as river sand shipment and inland river cargo, although development has been delayed due to the pandemic [49]. - The Group has been able to expand its services related to security screening for air cargo, which is expected to generate additional revenue in the next year [114]. - The Group plans to expand its security services for air cargo to new and existing customers, which is expected to generate additional revenue in the coming year [117]. Cost Management - The Group will enhance service capabilities and operational flexibility while implementing careful cost controls to strengthen competitiveness in the logistics industry [42]. - The Group's management has reduced directors' fees and salaries to control costs amid the challenging business environment [40]. - The Group's management believes that the economic volatility may continue in the short term, impacting consumer sentiment and business investment activities [116]. Corporate Governance - The company has complied with the corporate governance guidelines as per the GEM Listing Rules from April 1, 2019, to March 31, 2020 [189]. - The Board consists of two executive Directors, one non-executive Director, and three independent non-executive Directors, with independent Directors representing more than one-third of the Board [191]. - The company has established three Board committees: the Audit Committee, the Remuneration Committee, and the Nomination Committee [191]. - The Company emphasizes the importance of good corporate governance practices to enhance stakeholder confidence and support [192]. - The Company has adhered to the corporate governance code as outlined in the GEM Listing Rules during the reporting period [192]. Human Resources - The Group's total employee compensation and benefits cost for the year was approximately HK$21.1 million, an increase from approximately HK$19.9 million in the previous year [120]. - The Group employed a total of 61 staff as of March 31, 2020, compared to 45 staff in Hong Kong only in the previous year [119]. - The Group has successfully recruited two sales staff and provided them with training and medical insurance [140]. Investments and Utilization of Proceeds - The net proceeds from the listing amounted to approximately HK$40.0 million [139]. - As of March 31, 2020, HK$22.3 million of the net proceeds had been utilized, leaving HK$17.7 million unutilized [142]. - The Group has allocated HK$13.5 million for further expanding warehouses in Hong Kong, but has not yet identified suitable premises [140]. - HK$14.7 million was allocated to attract and retain talented personnel, with HK$6.2 million utilized for recruitment and training [140]. - The Group decided not to implement the plan for developing its own trucking fleet, resulting in the non-utilization of HK$8.1 million [142]. - HK$2.4 million was allocated for enhancing information technology systems, with HK$1.9 million fully utilized for upgrading the warehouse management system [142]. - Working capital of HK$1.3 million was fully applied to finance the cost of services and daily operations, particularly in air freight forwarding [142]. Management Team - The overall business development and strategy are overseen by the executive directors, with significant experience in the logistics industry [144][146]. - Mr. Lo has over 25 years of experience in management, auditing, and corporate finance, and has worked in a large international accounting firm [152]. - Mr. Ng has over 20 years of experience in finance and accounting, serving in various significant roles including chief financial officer and company secretary [155]. - Dr. Wu has been a lecturer at Hong Kong Baptist University since September 1999 and holds multiple degrees including a Doctor of Philosophy [163]. - Mr. Chow is a practicing solicitor in Hong Kong and has been a partner at V. Hau & Chow since 2006 [169].
万励达(08482) - 2020 - 年度财报