Financial Performance - For the fiscal year ending March 31, 2022, the group recorded total revenue of approximately HKD 165.8 million, an increase of about 12.8% compared to HKD 147.0 million for the previous fiscal year[5]. - Gross profit increased by approximately 3.0% to about HKD 95.8 million, while the gross profit margin decreased from approximately 63.3% to 58.0% due to lower selling prices to Chinese distributors[5]. - The net profit attributable to the company's owners was approximately HKD 11.9 million, an increase of about 18.0% from HKD 10.1 million in the previous year[5]. - The total revenue from sales of tiles and sanitary ware products increased by approximately 12.3% compared to the previous year[6]. - Revenue from the sale of tiles and sanitary ware products was approximately HKD 165.1 million, accounting for about 99.6% of total revenue for the year ended March 31, 2022[12]. - Gross profit for the year ended March 31, 2022, was approximately HKD 95.8 million, an increase of about 3.0% from HKD 93.0 million the previous year, despite a decrease in overall product profit margin from 63.3% to 58.0%[13]. - The group’s net profit attributable to shareholders was approximately HKD 11.9 million, an increase of about 18% from HKD 10.1 million the previous year[18]. - Employee costs for the year ended March 31, 2022, were approximately HKD 22.4 million, up from HKD 21.2 million the previous year, primarily due to increased sales commissions and discretionary bonuses[15]. - The group recorded rental income from property investment of approximately HKD 0.7 million for the year ended March 31, 2022, compared to zero the previous year[12]. Challenges and Strategic Responses - The group faced significant challenges due to the impact of COVID-19, particularly in the fourth quarter of the fiscal year[6]. - The group continues to implement cost-saving measures, including controlling costs and reducing rent, while also closing underperforming retail stores[6]. - Future prospects may remain challenging due to the emergence of COVID-19 variants, but the management team is confident in the group's long-term development and shareholder value enhancement[8]. - The group aims to diversify its revenue sources to stabilize financial performance amid changing market conditions[8]. - The company plans to diversify its revenue sources and strengthen partnerships with existing distributors in China despite challenges from COVID-19 variants[31]. Corporate Governance - The company has a strong governance structure with members serving on various committees including remuneration, audit, and nomination committees[42][45][51]. - The company is focused on enhancing shareholder value through effective management and strategic oversight by the board[61]. - The independent non-executive directors are committed to attending all future shareholder meetings to ensure compliance with governance standards[60]. - The company has a structured approach to corporate governance, with a dedicated committee overseeing compliance and performance[61]. - The management team has extensive experience in finance and corporate governance, with key members having nearly 30 years of experience in their respective fields[53][56]. - The company is actively reviewing its governance structure to ensure alignment with best practices and shareholder interests[60]. - The board consists of three independent non-executive directors, representing over one-third of the total board members, ensuring strong independent judgment[65]. - The company has adopted a board diversity policy to maintain a balance of skills, experience, and diversity to meet business needs since December 2018[66]. - The company has established several functional committees, including the Audit Committee and the Remuneration Committee, to assist the board in fulfilling its responsibilities[80]. Risk Management and Compliance - The board believes that the risk management and internal control systems are effective and adequate, having been reviewed by external independent professionals[128]. - The company is committed to maintaining a transparent environment regarding anti-corruption and compliance with legal requirements[125]. - The company acknowledges the importance of compliance with laws and regulations and has not been aware of any significant non-compliance issues during the year[198]. - The company has implemented a whistleblowing policy allowing employees to report any fraudulent or corrupt activities[126]. - There were no corruption lawsuits against the group or its employees for the year ended March 31, 2022[127]. Shareholder Information - The company did not recommend any dividend payment for the fiscal year[154]. - The company has adopted a dividend policy in December 2018, details of which can be found in the management discussion and analysis section of the annual report[120]. - The annual general meeting will be held on September 30, 2022, with a notice to be sent to shareholders at least 21 days prior[135]. - The company reported a total issued share capital of 240,000,000 shares with a par value of HKD 0.1 per share as of March 31, 2022[157]. - The company's distributable reserves were approximately HKD 54.1 million as of March 31, 2022, including share premium and accumulated losses[163]. Supplier and Customer Relationships - The top five customers accounted for less than 26.6% of total revenue for the fiscal year ending March 31, 2022[165]. - The top five suppliers accounted for approximately 54.2% of total procurement for the fiscal year ending March 31, 2022, compared to 29.1% in the previous year[165]. - The largest supplier accounted for about 33.4% of total procurement for the fiscal year ending March 31, 2022, up from 9.3% in the previous year[165]. - The company has established long-term business relationships with several major customers and suppliers, recognizing the importance of maintaining good relationships for long-term growth[165]. Management and Board Composition - Ms. Xu Daofei has been appointed as an executive director since January 26, 2018, and has extensive experience in overall strategy planning and management[41]. - Mr. Wu has over 17 years of fund management experience and has held various senior positions in asset management companies[42]. - Mr. Hu has served as an independent non-executive director and chairman of the audit committee, bringing rich experience in financial and business management[45]. - Mr. Xu has been appointed as an independent non-executive director and has experience in public transport operations in Hong Kong and mainland China[51]. - All directors have demonstrated the necessary skills and experience to fulfill their duties effectively, as confirmed in the annual assessment conducted on June 28, 2022[69]. Audit and Financial Oversight - The Audit Committee held three meetings during the fiscal year ending March 31, 2022, and reviewed the group's audited annual performance, confirming compliance with applicable accounting standards and regulations[98]. - The Remuneration Committee conducted one meeting during the fiscal year, reviewing and recommending the remuneration of directors, ensuring alignment with contractual terms and fairness[110]. - The Nomination Committee held two meetings during the fiscal year, assessing the board's structure, composition, and diversity, and evaluating the independence of non-executive directors[115]. - The Audit Committee monitored the integrity of the company's financial statements and discussed significant judgments related to financial reporting[98]. - The auditor's fees for the year ended March 31, 2022, were HKD 730,000 for statutory audit services and HKD 103,000 for non-audit services, compared to HKD 630,000 and HKD 70,000 for the previous year, respectively[121].
MOS HOUSE(01653) - 2022 - 年度财报