The directors herein present their annual report and the audited financial statements of the Company and the Group for the year ended 31 March 1998.
Principal Activities
The Group's principal activities during the year consisted of the production, dyeing and sale of knitted fabric and yarn, the retailing and distribution of casual apparel and accessories, the provision of repair and maintenance services of motors and generators, the trading of generators and the provision of franchise services. There was no change in the nature of the Group's activities during the year.
The principal activity of the Company is investment holding.
Segmented Information
The Group turnover and contribution to operating profit are predominately derived from activities in Hong Kong.
An analysis of the Group turnover and contribution to operating profit by principal activity for the year ended 31 March 1998 is as follows:
Results and Dividends
The Group's profit for the year ended 31 March 1998 and the state of affairs of the Company and the Group at that date are set out in the financial statements on pages 40 to 87.
An interim dividend of 1.75 cents per share was paid on 10 February 1998. The directors recommend the payment of a final dividend of 2.75 cents per share in respect of the year to shareholders whose names appear on the register of members on 24 September 1998. This recommendation has been incorporated in the financial statements.
Summary Financial Information
The table below summarises the results and the assets and liabilities of the Group for the last five financial years, as extracted from the published audited financial statements and reclassified as appropriate.
Fixed Assets and Investment Properties
Details of movements in the fixed assets and investment properties of the Group are set out in notes 8 and 9 to the financial statements, respectively.
Major Customers and Suppliers
In the year under review, both purchases and sales from/to the five largest suppliers/customers accounted for less than 30% of the total purchases and sales for the year.
No directors, their associates, or shareholders which to the knowledge of the directors owned more than 5% of the Company's share capital, had any interest in the above five largest customers or suppliers.
Bank Loans, Overdrafts and Other Borrowings
The amounts of bank loans, overdrafts and other borrowings of the Company and the Group at 31 March 1998 are set out in notes 17, 18 and 19 to the financial statements, respectively.
Share Capital
Details of movements in the share capital of the Company during the year, together with the reasons therefor, are set out in note 21 to the financial statements.
There are no provisions for pre-emptive rights under the Company's Bye-laws or the laws of Bermuda which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders.
Reserves
Details of movements in the reserves of the Company and the Group during the year are set out in note 22 to the financial statements.
Subsidiaries
Particulars of the Company's subsidiaries are set out in note 23 to the financial statements.
Distributable Reserves
At 31 March 1998, the Company's reserves available for cash distribution and/or distribution in specie amounted to HK$172,789,000. In addition, the Company's share premium account may be distributed in the form of fully paid up bonus shares.
Directors
The directors of the Company during the year were:
Executive Directors:
Independent Non-executive Directors:
Subsequent to the balance sheet date, on 30 July 1998, Mr. Lu Gong resigned as a director.
In accordance with the Company's Bye-laws, all existing directors will retire and, being eligible, offer themselves for re-election at the forthcoming Annual General Meeting.
Directors' Remuneration
The number of directors including independent non-executive directors, whose remuneration fell within the bands set out below is as follows:
There were no arrangements under which a director had waived or agreed to waive any remuneration.
Details of the options granted to the directors of the Company during the year are set out in note 21 to the financial statements. In the absence of a readily available market value of the options granted on the shares of the Company, the directors are unable to arrive at an accurate assessment as to the value of the options granted. Accordingly, the value of such option is not included in the emoluments set out above.
Employee Costs
The five highest paid individuals employed by the Group during the year were all directors, details of whose remuneration are set out above.
Employees
As at 31 March 1998, the Group had approximately 408, 5,587 and 152 in Hong Kong, the People's Republic of China ("PRC") and Taiwan respectively. The Group remunerates its employees largely based on industrial practice.
Pension Schemes and Costs
The Group had no pension arrangement for its employees during the year.
Directors' Service Contracts
On 15 July 1992, the Company entered into a service contract with each of the following directors for a term of three years from 1 July 1992, terminable by either party by giving not less than three months' written notice. On 28 June 1998, the Company extended service contracts with these directors for another term of three years.
Poon Bun Chak
Poon Kai Chak
Poon Kei Chak
Poon Kwan Chak
Ting Kit Chung
Save as disclosed above, no director proposed for re-election at the forthcoming Annual General Meeting has a service contract with the Company which is not determinable by the Company within one year without payment other than statutory compensation.
Directors' Interests in Contracts
Save as disclosed in note 28 to the financial statements, no director had a beneficial interest in any material contract to which the Company, its holding company or any of its subsidiaries was a party during the year.
Biographical Details of Directors and Senior Management
Executive Directors
Mr. Poon Bun Chak, aged 50, is the Chairman and Managing Director overseeing the planning, organisation and development of the Group. He founded the Group in 1975 and has over 23 years' experience in the textile field.
Mr. Poon Kai Chak, aged 48, is the younger brother of Mr. Poon Bun Chak. He joined the Group in 1980 and has over 18 years' experience in the industry. He is responsible for the knitting operations of the Group.
Mr. Poon Kei Chak, aged 46, is the younger brother of Mr. Poon Bun Chak. He joined the Group since its establishment in 1975 and has over 23 years' experience in the field. He looks after the dyeing operations and assists in the overall management of the Group.
Mr. Poon Kwan Chak, aged 52, is the elder brother of Mr. Poon Bun Chak. He joined the Group in 1976 and has over 22 years' related experience. He is responsible for the merchandising and sales management.
Mr. Ting Kit Chung, aged 42, is responsible for the general administration and financial management. He joined the Group in 1991 and has over 10 years' banking experience. He holds a Bachelor of Arts degree from the University of Hong Kong.
Independent Non-executive Directors
Mr. Au Son Yiu, aged 54, is a registered investment adviser and has extensive experience in the securities industry. He is a dealing director of HLG Securities (H.K.) Limited, a director of China Point Stock Brokers Limited and I & P Securities Limited, a consultant to Dao Heng Securities Limited and a non-executive director for several public companies listed on the Stock Exchange. In addition, he is an ex-deputy chairman of the Hong Kong Securities Clearing Company Limited (1992-1994) and ex-council member of the Stock Exchange (1988-1994).
Mr. Cheng Shu Wing, aged 48, is the Director of Laidlaw Pacific Limited. He holds a Bachelor of Business Administration degree from the Chinese University of Hong Kong and has over 22 years' experience in the banking and securities industries in Hong Kong.
Mr. Lu Gong, aged 40, is the Director of Super Worth Holdings Limited. Prior to joining the Company in 1997, Mr. Lu was a controller in the China division of Hong Kong Telecom.
Senior Management
Mr. Chan Min, aged 43, is a director of the Group's retail operations. He is a graduate of Hong Kong Polytechnic (now Hong Kong Polytechnic University) and is a member of the British Computer Society. Prior to joining the Group in 1996, Mr. Chan had over 13 years' experience as a business and management information consultant in retail business.
Mr. Chan Chi Hon, aged 36, joined the Group in 1997 and is the Group Financial Controller and Company Secretary. Mr. Chan holds a masters degree in Commerce from the University of New South Wales and is an associate member of the Hong Kong Society of Accountants and a certified practising accountant of the Australian Society of Certified Practising Accountants. He has over 11 years' experience in auditing and accounting.
Mr. Chau Kuen Kai, aged 40, is a factory manager of the knitting operations of the Group. He joined the Group in 1979 and has over 18 years' experience in the knitting industry.
Mr. Fung Koon Kam, aged 43, is a factory manager of the yarn dyeing operations of the Group. He holds a Diploma in the Textile Technology from Hong Kong Polytechnic (now Hong Kong Polytechnic University). He joined the Group in 1991 and has over 18 years' experience in the dyeing and finishing industry.
Mr. Fung Wai Lun, aged 41, is the Director of the Group's retail operations. Before joining the Group in 1996, Mr. Fung had over 20 years' experience in the retailing industry.
Mr. Hon Siu Kit, aged 38, is the Director of Nice Dyeing Factory Limited, a subsidiary of the Group engaged in the sale of finished knitted fabric. He joined the Group in 1993 and has over 20 years' experience in the textile industry.
Mr. Lai Ka Wo, aged 48, is the General Manager of the Group's motor and generator services operations in the PRC. He is an associate member of the Institute of Motor Industry. Mr. Lai joined the Group in 1995 and has over 28 years' experience in the motor industry.
Ms. Leung Mei Yin, aged 33, is the Director of Nice Dyeing Factory Limited, a subsidiary of the Group engaged in the sale of finished knitted fabric. She joined the Group in 1990 and has over 12 years' experience in the textile industry.
Mr. Li Kwai Leung, aged 41, is the Director of the Group's garment manufacturing operation, Megawell Industrial Limited. He joined the Group in 1997 and has over 21 years' experience in the garment industry.
Mr. Liu Ying Che, aged 33, is the Factory Manager of the fabric dyeing operations of the Group. He joined the Group in 1989 and has over 14 years' experience in the dyeing and finishing industry.
Mr. Wong Kwok Keung, aged 43, is the Director of the Group's garment manufacturing operations, Megawell Industrial Limited. He joined the Group in 1997 and has over 21 years' experience in the garment industry.
Mr. Ting Kit Hung, aged 46, is the Director and Chief Executive of the Group's motor and generator services operations in the PRC. Mr. Ting is an associate member of the Institute of Motor Industry, the Chartered Institute of Transport and the British Institute of Management. He also holds a Masters degree in Business Administration from the University of East Asia, Macau. He joined the Group in 1995 and has over 28 years' experience in the motor industry. He is the elder brother of Mr. Ting Kit Chung.
Mr. Wong Tung Yiu, aged 43, is the Director and General Manager of Nice Dyeing Factory Limited, a subsidiary of the Group engaged in the sale of finished knitted fabric. He joined the Group in 1994 and has over 24 years' experience in the textile industry.
Directors' Interests in Share Capital
At 31 March 1998, the interests of the directors and their associates in the share capital of the Company and its associated corporations as recorded in the register maintained by the Company pursuant to Section 29 of the Securities (Disclosure of Interests) Ordinance ("SDI Ordinance") were as follows:
Note:
234,800,104 shares are owned by Farrow Star Limited, which is wholly-owned by Perfection Inc. as trustee for The Evergreen Trust, a discretionary trust, the objects of which include the family members of Poon Bun Chak. These shares are held as family interests under the SDI Ordinance.
571,200,000 shares are owned by Giant Wizard Corporation in which Farrow Star Limited has an 80% equity interest, and are held as corporate interests under the SDI Ordinance. 12.4% interest in Giant Wizard Corporation is owned by Poon Kai Chak, Poon Kei Chak and Poon Kwan Chak.
Save as disclosed above, none of the directors or the spouses, or children under 18 years of age of any such directors or chief executives or their associates had any personal, family, corporate or other interests in the share capital of the Company or any of its associated corporations as defined in the SDI Ordinance.
Directors' Rights to Acquire Shares
Apart from the share option scheme as detailed in note 21 to the financial statements, at no time during the year was the Company or any of its subsidiaries a party to any arrangements to enable the Company's directors, their respective spouses, or children under 18 years of age to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Substantial Shareholders
At 31 March 1998, no person, other than Mr. Poon Bun Chak whose interests are set out above, had registered an interest in the share capital of the Company that was required to be recorded under Section 16(1) of the SDI Ordinance.
Purchase, Redemption or Sale of Listed Securities
Particulars of the repurchases of shares by the Company during the year are set out in note 21 to the financial statements. Except for the foregoing, neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the year.
Subsequent to the balance sheet date, the Company repurchased certain of its own shares as set out in note 30 to the financial statements.
Connected Transactions
Nice Dyeing Factory Limited, a wholly-owned subsidiary of the Company, provided advances totalling HK$230,867,560 to Baleno Kingdom Limited, a non-wholly-owned subsidiary, at prime rate minus 1.75% per annum during the year. The advances are unsecured and have no fixed terms of repayment. The principal purpose of these advances is to finance the non-wholly-owned subsidiary's operations.
On 1 April 1997, the Group purchased from Perfection Inc. ("Perfection") its entire 50% interest in the issued share capital of Megawell Industrial Limited ("Megawell") for a total consideration of HK$150 million. Perfection is the trustee of the Evergreen Trust, a discretionary trust the beneficiaries of which include the family members of Mr. Poon Bun Chak. The consideration was satisfied as to HK$37,500,000 in cash and HK$112,500,000 by the issue of 19,430,052 new shares of HK$0.1 each at a price of HK$5.79 per share.
Share Option Scheme
On 15 July 1992, the Company adopted a share option scheme the details of which are set out in note 21 to the financial statements.
Details of options granted to the directors under this scheme are as follows:
All the above options were granted pursuant to the Company's share option scheme as detailed in note 21 to the financial statements.
Code of Best Practice
In the opinion of the directors, the Company has complied with the Code of Best Practice as set out in Appendix 14 of the Listing Rules of The Stock Exchange of Hong Kong Limited throughout the accounting period covered by the annual report, except that the independent non-executive directors of the Company are not appointed for specific terms. Independent non-executive directors are subject to retirement and re-election at the Annual General Meeting of the Company in accordance with the provisions of the Company's Articles of Association.
Year 2000 Compliance
The Group has paid the highest regard to the problem of Millennium Bug and has completed its investigation of the problem. We have targeted to fully solve the problem by the end of 1998. As the Group has taken into account the Millennium Bug problem in designing the computer application system, therefore, we have confidence that the Millennium Bug should not have any impact on our system.
Subsequent Events
Details of the significant post balance sheet events are set out in note 30 to the financial statements.
Auditors
Ernst & Young retire and a resolution for their re-appointment as auditors of the Company will be proposed at the forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD
Poon Bun Chak
Chairman
Hong Kong, 18 August 1998
| © Copyright 1996-2024 irasia.com Ltd. All rights reserved. |
|
DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any
information provided on this website. Under no circumstances shall irasia.com Ltd be liable
for damages resulting from the use of the information provided on this website.
TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website. |