Economic Challenges - The company faced significant challenges in the garment procurement segment due to geopolitical tensions and high inflation, leading to a decrease in consumer spending power and overall demand for textiles [8]. - In 2022, China's GDP growth was only 3.0%, significantly below the expected 5.5%, impacting the retail market, with clothing and textile sales declining by 6.5% [12]. - The group anticipates that customer demand will remain weak in the short term due to economic uncertainties, including high inflation and geopolitical tensions [23]. Financial Performance - The group's revenue for the reporting period was approximately HKD 123,210,000, a slight increase of 0.71% from HKD 122,339,000 in 2022 [26]. - The gross profit margin decreased to approximately 4.48%, down by 0.53 percentage points from 5.01% in 2022 [26]. - The group reported a loss attributable to owners of approximately HKD 5,509,000, an improvement from a loss of HKD 12,673,000 in 2022 [26]. Operational Adjustments - The company adjusted its sales strategy to a low-margin, high-volume approach, which helped stabilize business conditions, resulting in overall sales improvement compared to the previous year [13]. - The financial services segment, including asset management and lending, was expanded to diversify revenue sources, with a focus on the Hong Kong and mainland China markets [14]. - The lending business, operated by a wholly-owned subsidiary, reported no defaults on interest or principal during the reporting period, indicating a stable credit environment [17]. Asset Management - As of March 31, 2023, total assets were approximately HKD 140,401,000, up from HKD 135,124,000 a year earlier [27]. - The current ratio was 2.85:1, indicating a healthy liquidity position, slightly down from 2.87:1 in 2022 [27]. - The group maintained no bank or other borrowings as of March 31, 2023, consistent with the previous year [27]. Employee and Administrative Costs - Administrative expenses increased by approximately 17.17% to HKD 13,373,000, compared to HKD 11,413,000 in 2022 [26]. - The total salary and related costs for employees amounted to approximately HKD 8,152,000 for the year ending March 31, 2023, an increase from HKD 5,898,000 in the previous year [45]. - The group employs approximately 25 staff members (excluding directors), indicating a relatively small workforce [45]. Investment Strategy - The group maintains a low-risk investment strategy aimed at generating stable returns and improving capital utilization [51]. - The fair value of the investment in SenseTime Group is HKD 2,660,000, representing 1.89% of total assets [46]. - The group continues to focus on diversifying investments to achieve stable returns [51]. Corporate Governance - The company has adhered to all corporate governance code provisions for the year ending March 31, 2023, with no significant violations reported [143]. - The company has not established an internal audit function due to considerations of scale and cost-effectiveness, relying instead on the audit committee to review internal control systems annually [135]. - The board of directors is committed to ensuring sufficient reserves for future development while allowing shareholders to share in the company's profits [79]. Risk Management - The risk management policy aims to enhance risk management and ensure business continuity while maintaining the company's healthy development [170]. - The company has established a risk assessment and management program to identify potential risks related to unrealized goals [176]. - The board is responsible for overseeing the internal control system to protect the company's assets and shareholders' interests [177]. Shareholder Communication - The company has a policy to facilitate effective communication between the company and its investors and shareholders [179]. - The board is satisfied with the effective implementation of the shareholder communication policy during the reporting period [182]. - Shareholders have the right to request the convening of a special general meeting under specified conditions [184]. Audit and Compliance - The independent auditor confirmed that the consolidated financial statements reflect the group's financial position and performance accurately as of March 31, 2023 [193]. - The audit identified the assessment of impairment of accounts receivable as a key audit matter due to its significance in the overall financial statements [198]. - The group must ensure compliance with the Hong Kong Companies Ordinance in preparing financial statements [193].
杭品生活科技(01682) - 2023 - 年度财报