Financial Performance - The total revenue for the fiscal year ending March 31, 2023, was approximately HKD 153.9 million, a decrease of about 7.2% compared to HKD 165.8 million for the previous fiscal year[5]. - Gross profit was approximately HKD 81.1 million, down about 15.3% from HKD 95.8 million in the previous year, with a profit margin decreasing from 58.0% to 52.9%[5]. - Net profit attributable to shareholders was approximately HKD 1.4 million, a significant decrease of about 88.2% from HKD 11.9 million in the previous year[5]. - Retail sales of tiles and sanitary ware products decreased by approximately 20.5% to about HKD 94.2 million, compared to HKD 118.5 million in the previous year[6]. - Non-retail sales increased by approximately 27.0% to about HKD 59.2 million, driven by the introduction of high-end European kitchen cabinets[6]. - Rental income from property investments was approximately HKD 0.5 million, down from HKD 0.7 million in the previous year due to rent concessions offered to tenants[6]. - The group's total revenue for the year ended March 31, 2023, was approximately HKD 153.9 million, a decrease of about 7.2% from HKD 165.8 million for the year ended March 31, 2022[17]. - Retail sales of tiles, sanitary ware, and other products generated revenue of approximately HKD 94.2 million, down about 20.5% from HKD 118.5 million in the previous year[17]. - Non-retail sales increased by approximately 27.0% to HKD 59.2 million, compared to HKD 46.6 million in the previous year[17]. - The gross profit for the year was approximately HKD 81.1 million, a decrease of about 15.3% from HKD 95.8 million in the previous year, with the overall product profit margin declining from 58.0% to 52.9%[18]. - The company's attributable profit for the year was approximately HKD 1.4 million, a significant decrease of about 88.2% from HKD 11.9 million in the previous year[22]. Operational Efficiency and Strategy - The company aims to diversify its revenue sources and enhance its product offerings, focusing on high-end sanitary ware and kitchen cabinets[9]. - The management team is committed to maintaining operational efficiency and negotiating reasonable rents during lease renewals[7]. - The company plans to strengthen partnerships with existing distributors and project clients to boost non-retail sales revenue[9]. - The management expresses confidence in the long-term development and ability to enhance shareholder value despite challenging market conditions[10]. - The company aims to expand its product portfolio by selectively increasing non-tile products, including high-end European sanitary ware and kitchen cabinets[34]. - The company plans to enhance non-retail sales by strengthening collaborations with existing distributors and project clients, including interior design firms and property developers[34]. - The company is focused on diversifying its revenue sources to stabilize financial performance amid a challenging market environment[35]. Corporate Governance - The company has a strong governance structure with independent directors on key committees, ensuring compliance and oversight[45]. - The management team is well-qualified, with members holding advanced degrees and professional qualifications in finance and management[50]. - The board of directors has no conflicts of interest with major shareholders, ensuring unbiased decision-making[45]. - The company is committed to maintaining high standards of corporate governance and transparency in its operations[46]. - The board consists of five directors, including two executive directors and three independent non-executive directors, ensuring a strong independent element[58]. - The company has adopted a board diversity policy to ensure a balanced mix of skills, experience, and diversity in its board composition[60]. - The company held seven board meetings during the fiscal year, including discussions on the acquisition of a company that was ultimately terminated due to unmet conditions[65]. - The company has confirmed the independence of all three independent non-executive directors following an annual assessment[59]. - The company plans to maintain at least one female director on the board to support gender diversity initiatives[62]. - The board will continue to review the separation of the roles of chairman and CEO to align with best practices in corporate governance[55]. - The company has established mechanisms to ensure independent opinions and advice are available to the board[63]. - The annual general meeting is scheduled for September 18, 2023, to address board re-elections and other corporate matters[65]. - The board of directors had a high attendance rate, with the chairman and CEO attending 6 out of 7 meetings[67]. - The audit committee held three meetings during the fiscal year ending March 31, 2023, with full attendance from its members[77]. - The company confirmed no disagreements between the board and the audit committee regarding the reappointment of the external auditor for the upcoming year[78]. - The company has established four functional committees to assist the board in fulfilling its duties, including the audit committee, remuneration committee, nomination committee, and corporate governance committee[74]. - All directors confirmed compliance with the trading code for securities transactions as of March 31, 2023[70]. - The company provides necessary onboarding training for newly appointed directors to ensure understanding of operations and responsibilities[71]. - The remuneration committee consists of three members, including two independent non-executive directors[79]. - The audit committee is chaired by a member with appropriate professional qualifications in accounting or related financial management[75]. - The company encourages continuous professional development for all directors to enhance their knowledge and skills[72]. - The company has purchased appropriate insurance to protect its directors and senior management against potential legal actions[68]. - The remuneration committee held one meeting during the year ended March 31, 2023, to review and recommend the remuneration for executive directors, with attendance rates of 100% for all members[81]. - The audit fees for the year ended March 31, 2023, were HKD 740,000 for statutory audit services and HKD 115,000 for non-audit services, compared to HKD 730,000 and HKD 103,000 for the previous year, respectively[88]. - The nomination committee also held one meeting during the year ended March 31, 2023, with all members attending 100% of the meetings[84]. - The corporate governance committee reviewed the group's compliance with legal and regulatory requirements during the year ended March 31, 2023, and held one meeting with full attendance[86]. - The company has adopted a dividend policy since December 2018, details of which can be found in the management discussion and analysis section of the annual report[87]. - There were no corruption lawsuits against the group or its employees for the year ended March 31, 2023, and no whistleblower reports were received[92]. - The company secretary confirmed completion of at least 15 hours of relevant professional training as required by the listing rules for the year ended March 31, 2023[89]. - The remuneration committee reviewed the remuneration of directors and senior management, ensuring compliance with contractual terms and fairness in compensation arrangements[83]. - The company is committed to maintaining a transparent environment with anti-corruption procedures in place, adhering to legal and regulatory requirements[90]. - The company has established reporting channels for employees to report any fraudulent or corrupt activities[91]. - The board evaluated the effectiveness of the group's risk management and internal control systems for the year ending March 31, 2023, and deemed them effective and sufficient[93]. - An external independent professional was hired to review and further strengthen the risk management and internal control systems during the year ending March 31, 2023[93]. - The company has no internal audit department; the board believes hiring external professionals for internal audit work is more cost-effective given the group's scale and complexity[93]. - The annual general meeting will be held on September 18, 2023, providing a platform for direct communication between the board and shareholders regarding the group's performance and future development[97]. - The company has adopted and implemented insider information policies to ensure timely and accurate disclosure of relevant information according to securities and futures regulations[95]. - The company confirmed that its consolidated financial statements fairly reflect its financial position and comply with relevant accounting standards and regulations[95]. Environmental, Social, and Governance (ESG) Performance - The company emphasizes the importance of environmental, social, and governance (ESG) performance for long-term growth and value creation[108]. - The environmental, social, and governance (ESG) report covers activities, challenges, and measures taken for the fiscal year ending March 31, 2023[113]. - The company emphasizes the importance of stakeholder feedback in identifying significant ESG issues, conducting a three-step materiality assessment[119]. - Key ESG issues identified include product and service quality, customer health and safety, and customer communication and satisfaction[119]. - The company has established effective management policies and internal control systems for ESG issues, ensuring compliance with Hong Kong Stock Exchange guidelines[120]. - The board evaluates the significance of identified ESG risks and oversees the progress of related goals and initiatives[123]. - Climate-related financial disclosures are guided by the recommendations of the Task Force on Climate-related Financial Disclosures, focusing on governance, strategy, risk management, and metrics[122]. - The company acknowledges the physical climate risks posed by extreme weather events and rising sea levels, which may impact employee safety and retail locations[124]. - The company is committed to continuous monitoring and improvement of its internal control and risk management systems to ensure business sustainability[115]. - The report aims to provide quantitative indicators and relevant targets to demonstrate the company's impact[112]. - The company encourages stakeholder opinions and suggestions to enhance its sustainable development efforts[114]. - The company aims to reduce carbon emissions year-on-year and has implemented various measures to decrease energy usage and water consumption in daily operations[126]. - In the reporting period, the company replaced fuel vehicles with electric vehicles, resulting in a decrease in air pollutants and greenhouse gas emissions density compared to the previous reporting year[130]. - The total greenhouse gas emissions (Scope 1 and 2) for the fiscal year 2023 amounted to 631.14 tons of CO2 equivalent, an increase from 582.32 tons in fiscal year 2022[132]. - The greenhouse gas emissions density (Scope 1 and 2) was 4.10 tons of CO2 equivalent per million HKD in revenue, down from 4.46 tons in the previous year[132]. - The total amount of non-hazardous waste generated in fiscal year 2023 was 63.45 tons, a decrease from 105.75 tons in fiscal year 2022[135]. - The density of non-hazardous waste generated was 0.0019 tons per million HKD in revenue, significantly lower than 0.81 tons in the previous year[135]. - The company is committed to enhancing low-carbon policies and performance in response to the increasing potential impacts of climate change on future business[126]. - The company has established a structured internal control and risk management system to identify climate change risks and opportunities, enhancing resilience[125]. - The company promotes a paperless office initiative and encourages double-sided printing to reduce paper consumption[134]. - The company engages with stakeholders through various communication channels to address concerns and improve environmental, social, and governance performance[128]. - Total energy consumption increased to 4,129,254.80 MJ in 2023 from 3,205,196.61 MJ in 2022, representing a year-on-year increase of approximately 28.8%[137]. - Direct energy consumption rose to 411,967.38 MJ in 2023, up from 340,377.38 MJ in 2022, indicating a 21% increase[137]. - Total water consumption decreased to 355.00 cubic meters in 2023 from 453.28 cubic meters in 2022, reflecting a reduction of approximately 21.7%[139]. - Total packaging material consumption decreased to 0.84 tons in 2023 from 1.8 tons in 2022, showing a decline of about 53.3%[141]. - Employee turnover rate decreased slightly to 33.60% in 2023 from 34.78% in 2022[150]. - The number of employees increased to 65 in 2023 from 61 in 2022, marking a growth of approximately 6.6%[150]. - The density of energy consumption increased to 7,452.99 kWh per million HKD revenue in 2023 from 6,814 kWh in 2022, indicating a rise of about 9.3%[137]. - Water consumption density improved to 2.31 cubic meters per million HKD revenue in 2023 from 3.47 cubic meters in 2022, a decrease of approximately 33.4%[139]. - Packaging material density decreased to 0.0055 tons per million HKD revenue in 2023 from 0.011 tons in 2022, reflecting a reduction of about 50%[141]. - The company has not faced any significant administrative sanctions or penalties related to environmental laws during the reporting period[143]. - The total number of board members remained stable at 5 in both 2023 and 2022, with 4 males and 1 female[151]. - The percentage of trained employees decreased significantly to 23.26% in 2023 from 63.93% in 2022[154]. - The average training hours per employee increased to 41.86 hours in 2023 from 0.1 hours in 2022[154]. - The number of suppliers increased to 81 in 2023 from 76 in 2022, with a notable rise in suppliers from Hong Kong from 15 to 41[159]. - The company reported one work-related injury during the reporting period, resulting in 129 days lost due to injury, compared to 18 days in 2022[152]. - The board training percentage reached 40% in 2023, a significant increase from 0% in 2022[154]. - The company has implemented measures to ensure a safe working environment, with no significant violations of health and safety laws reported[152]. - The company has a strict policy against child labor and forced labor, ensuring compliance with relevant laws and regulations[155]. - The average training hours for male employees were 43.33 hours, while female employees had an average of 39.375 hours in 2023[154]. - The company emphasizes environmental sustainability in supplier selection, with most suppliers holding environmental certifications[158]. - The company donated a total of HKD 630,000 to support health, sports, and social welfare activities during the reporting period[167]. - The breakdown of donations includes HKD 598,000 for health, HKD 22,000 for sports, and HKD 10,000 for social welfare[168]. - The company has registered some trademarks and domain names in Hong Kong and China to protect its intellectual property[162]. - There were no product recalls due to safety and health reasons during the reporting period, and no complaints regarding product quality were received[162]. - The company has implemented strict data privacy policies to safeguard sensitive information related to its operations and business activities[166]. - A total of 1 director and 5 employees received anti-corruption training during the reporting period[163]. - The company encourages employees to participate in local community volunteer activities to foster harmonious relationships with the community[166]. - The company adheres to relevant laws and regulations regarding product safety, health, and advertising, including the Sale of Goods Ordinance and the Consumer Goods Safety Ordinance[162]. - The company has established a whistleblowing channel for employees to report any fraudulent or corrupt practices[163]. - There were no corruption litigation cases against the company or its employees during the reporting period[164]. - The company reported a charitable donation of approximately HKD 630,000 for the year ending March 31, 2023, compared to zero in 2022[187]. - As of March 31, 2023, the company's distributable reserves amounted to approximately HKD 51.4 million, including share premium and accumulated losses[190]. - The top five suppliers accounted for approximately 28.6% of the total procurement for the year ending March 31, 2023, down from 54.2% in 2022[192]. - The largest supplier represented about 9.8% of the total procurement for the year ending March 31, 2023, compared to 33.4% in 2022[192]. - The company did not recommend any dividend payment for the year[181]. - The main business of the company is investment holding, primarily engaged in the retail and supply of foreign-made tiles and sanitary ware in Hong Kong and Macau[177]. - The company has established long-term business relationships with several major clients and suppliers, which are crucial for long-term business growth[191]. - The company’s financial performance and asset summary over the past five fiscal years are detailed in the annual report[182]. - The board of directors presented the audited consolidated financial statements for the year ending March 31, 2023[176]. - The company’s operational practices include measures to avoid child and forced labor in recruitment[175]. - No significant transactions, arrangements, or contracts involving directors with substantial interests were reported as of March 31, 2023[196]. - No management contracts involving a significant portion of the company's business were established during the year[197]. - No major contracts were reported between the company and its controlling shareholders or their subsidiaries during the year[198]. - Details of compensation for directors and the five highest-paid individuals in the group are provided in the financial statements[199]. - As of March 31, 2023, three senior management members (non-directors) received salaries ranging from 0 to 1,000,000 HKD, compared to two in the previous year[200]. - One senior management member (non-director) received a salary between 1,000,001 HKD and 1,500,000 HKD in the previous year, but none in the current year[200].
MOS HOUSE(01653) - 2023 - 年度财报