LEE & MAN HANDBAGS HOLDING LIMITED 理文手袋集團有限公司 (Incorporated in the Cayman Islands with limited liability) ( 於開曼群島註冊成立之有限公司 ) Stock Code 股份代號 :1488 INTERIM REPORT 2014 中期報告
Interim Report 2014 中期報告 Contents 目錄 CORPORATE INFORMATION 2 INTERIM RESULTS 中期 4 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 4 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 5 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 6 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 7 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 報 8 INTERIM DIVIDEND 中期 20 CLOSURE OF REGISTER OF MEMBERS 20 BUSINESS REVIEW AND PROSPECTS 20 01 MANAGEMENT DISCUSSION AND ANALYSIS 22 OTHER INFORMATION 25
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 Corporate Information 公司資料 BOARD OF DIRECTORS Executive directors Ms. Wai Siu Kee (Chairman) Mr. Kung Phong Ms. Lee Man Ching Ms. Poon Lai Ming (resigned on 1 July 2014) 文 2014 7 1 Independent non-executive directors Mr. Heng Victor Ja Wei Mr. So Wing Keung Mr. Tsang Hin Man Terence 文 COMPANY SECRETARY Ms. Wong Yuet Ming REGISTERED OFFICE 02 Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands PRINCIPAL OFFICE 8th Floor, Liven House 61 63 King Yip Street Kwun Tong Kowloon Hong Kong 61 63 8 PRINCIPAL BANKERS In Hong Kong: Hang Seng Bank Limited The Hongkong and Shanghai Banking Corporation Limited 有限公司 有限公司
Interim Report 2014 中期報告 Corporate Information 公司資料 AUDITORS Deloitte Touche Tohmatsu Certified Public Accountants PRINCIPAL SHARE REGISTRAR Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Grand Cayman KY1-1110 Cayman Islands HONG KONG BRANCH SHARE REGISTRAR Tricor Secretaries Limited Level 22, Hopewell Centre 183 Queen s Road East Hong Kong 183 中 22 WEBSITE http://www.leemanhandbags.com http://www.leemanhandbags.com 03
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 The board of directors (the Board ) of Lee & Man Handbags Holding Limited (the Company ) is pleased to announce the unaudited interim results of the Company and its subsidiaries (the Group ) for the six months ended 30 June 2014 together with comparative figures for the last corresponding period as follows: 理文手袋集團有限公司 公司 公 公司 公司 集團 2014 6 306 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2014 2014 6 306 Six months ended 30 June 6 306 2014 2013 (Unaudited) (Unaudited) ( ) ( ) Notes HK$ 000 HK$ 000 Revenue 3 386,040 395,539 Cost of sales (310,931) (305,716) Gross profit 75,109 89,823 04 Other income 2,745 6,922 Selling and distribution costs (13,839) (12,861) General and administrative expenses (40,501) (40,301) Finance costs (160) (165) Profit before taxation 23,354 43,418 Income tax expense 4 (2,257) (3,333) Profit for the period 5 21,097 40,085 Other comprehensive (expense) income: Item that may be subsequently reclassified to profit or loss : Exchange differences arising from translation (577) 340 Total comprehensive income for the period 20,520 40,425 Earnings per share (HK cents) 7 2.6 4.9
Interim Report 2014 中期報告 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2014 2014 6 30 NON-CURRENT ASSETS 30.06.2014 31.12.2013 (Unaudited) (Audited) ( ) () Notes HK$ 000 HK$ 000 Property, plant and equipment 8 55,810 54,668 Prepaid lease payments 23,193 23,577 Investment properties 27,641 27,641 Deposits paid for the acquisition of property, plant and equipment 1,475 686 Defined benefit assets 3,886 3,886 112,005 110,458 CURRENT ASSETS Inventories 9 118,817 110,280 Prepaid lease payments 628 629 Trade and other receivables 10 175,617 126,367 Derivative financial instruments 201 405 Tax recoverable 711 2,996 Bank balances and cash 78,508 42,683 05 374,482 283,360 CURRENT LIABILITIES Trade and other payables 11 111,392 104,047 Amount due to a related company 286 263 Tax payable 347 2 Bank borrowings 94,523 17,329 206,548 121,641 NET CURRENT ASSETS 167,934 161,719 TOTAL ASSETS LESS CURRENT LIABILITIES 279,939 272,177 NON-CURRENT LIABILITY Deferred tax liability 128 511 NET ASSETS 279,811 271,666 CAPITAL AND RESERVES Share capital 82,500 82,500 Reserves 197,311 189,166 279,811 271,666
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2014 (Unaudited) 2014 6 306 Share Asset revaluation Translation Special Accumulated capital reserve reserve reserve profits Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (note i) (note ii) i ii At 1 January 2013 (audited) 2013 1 1 82,500 6,641 6,208 (38,562) 213,294 270,081 Profit for the period 40,085 40,085 Other comprehensive income for the period 340 340 Total comprehensive income for the period 340 40,085 40,425 Dividends recognised as distributions (41,250) (41,250) At 30 June 2013 (unaudited) 2013 6 30 82,500 6,641 6,548 (38,562) 212,129 269,256 06 At 1 January 2014 (audited) 2014 1 1 82,500 6,641 4,928 (38,562) 216,159 271,666 Profit for the period 21,097 21,097 Other comprehensive expense for the period (577) (577) Total comprehensive (expense) income for the period (577) 21,097 20,520 Dividend recognised as distributions (12,375) (12,375) At 30 June 2014 (unaudited) 2014 6 30 82,500 6,641 4,351 (38,562) 224,881 279,811 notes: (i) The asset revaluation reserve represented increase in revaluation arising from the owner-occupied properties becoming to investment properties prior to 1 January 2008. (i) 2008 1 1 有 (ii) The special reserve of the Group represents: (ii) 集團 1. the difference between the nominal value of the share capital issued by Lee & Man Development Limited ( LM Development ) and the nominal value of the share capital of subsidiaries acquired by it pursuant to a group reorganisation in 1993. 1. 理文 有限公司 理文 集團 1993 公司 2. the difference between the nominal value of the share capital of a subsidiary, LM Development, acquired pursuant to a group reorganisation in June 2011 and the nominal value of the share capital issued by the Company; and 2. 集團 2011 6 公司理文 公司 3. the expenses borne by shareholder for the listing of the Company. 3. 公司
Interim Report 2014 中期報告 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS For the six months ended 30 June 2014 2014 6 306 NET CASH (USED IN) FROM OPERATING ACTIVITIES 業 Six months ended 30 June 6 306 2014 2013 (Unaudited) (Unaudited) ( ) ( ) HK$ 000 HK$ 000 (21,036) 5,921 INVESTING ACTIVITIES Acquisition of property, plant and equipment (6,766) (3,913) Interest received 52 108 Other investing activities (774) 16 Net cash used in investing activities (7,488) (3,789) FINANCING ACTIVITIES Repayment of bank borrowings (17,329) (50,000) Dividends paid (12,375) (41,250) Bank borrowings raised 94,523 41,708 07 Net cash from (used in) financing activities 64,819 (49,542) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 36,295 (47,410) Cash and cash equivalents at beginning of the period 期 42,683 80,038 Effect on changes in exchange rate (470) 46 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 期 78,508 32,674
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION 1. The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ). 公 公 34 有限公司 16 2. PRINCIPAL ACCOUNTING POLICIES 2. The condensed consolidated financial statements have been prepared on the historical cost basis except for derivative financial instruments that are measured at fair values. 公 08 Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2014 are the same as those followed in the preparation of the Group s financial statements for the year ended 31 December 2013. 文, 2014 6 306 集團 2013 12 31 In the current interim period, the Group has applied, for the first time, certain amendments to Hong Kong Financial Reporting Standards ( HKFRSs ) and Interpretations issued by the HKICPA that are mandatorily effective for the current interim period. 集團 公 The application of the amendments to HKFRSs and Interpretations in the current interim period has had no material effect on the amounts reported and/or disclosures set out in these condensed consolidated financial statements.
Interim Report 2014 中期報告 3. SEGMENT INFORMATION 3. HKFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operation decision makers ( CODMs ), being the executive directors of the Company, in order to allocate resources to segments and to assess their performance. The CODMs review the Group s results and financial position as a whole, which is generated solely from the manufacture and sale of handbags and determined in accordance with the Group s accounting policies, for performance assessment and resources allocation. Therefore no separate segment information is prepared by the Group. 報告 8 報告 期 報告 The Group s operations are located in the United States of America ( USA ), the Europe, Hong Kong, and the People s Republic of China ( PRC ). Sales to the largest customer contributed to 12.2% (2013: 15.5%) of the Group s total turnover. 中 中 12.2% 2013 15.5% Revenue from customers from sales of handbags of the corresponding period contributing over 10% of the total sales of the Group is as follows: 10% 期 09 Six months ended 30 June 6 306 2014 2013 HK$ 000 HK$ 000 Customer A A 46,990 61,158 Customer B B 43,184 40,743 Customer C C N/A* * 47,368 Customer D D N/A* * 42,673 * The corresponding revenue did not contribute over 10% of the total sales of the Group. * 10% The Group s investment properties are located in Thailand. The rest of the Group s non-current assets, other than defined benefit assets, are located in the PRC. 中
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 3. SEGMENT INFORMATION (CONTINUED) 3. The Group s revenue from external customers by geographical location during the period is as follows: 集團 Revenue from external customers Six months ended 30 June 6 306 2014 2013 HK$ 000 HK$ 000 10 Hong Kong 19,157 23,411 PRC 21,785 8,823 USA 144,242 160,789 Canada 15,016 4,932 The Netherlands 19,153 20,725 Italy 64,759 74,531 The United Kingdom 9,871 9,145 Germany 8,768 8,534 Other European countries 26,005 26,005 South American countries 481 13,359 Other Asian countries 56,803 45,285 386,040 395,539
Interim Report 2014 中期報告 4. INCOME TAX EXPENSE 4. Six months ended 30 June 6 306 2014 2013 HK$ 000 HK$ 000 The charge comprises: Current tax: 期 Hong Kong Profits Tax 2,285 3,402 PRC Enterprise Income Tax ( EIT ) 中 355 68 2,640 3,470 Deferred tax current period 期 (383) (137) 2,257 3,333 Hong Kong Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for both periods. According to the 50:50 onshore/offshore arrangement between the Group and the Inland Revenue Department in Hong Kong, certain profit of the Group is not subject to tax. 期 16.5% 50 50 11 PRC 中 Under the Law of the PRC on EIT and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% from 1 January 2008 onwards. 中 中 2008 1 125%
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 5. PROFIT FOR THE PERIOD 5. Six months ended 30 June 6 306 2014 2013 HK$ 000 HK$ 000 Profit for the period has been arrived at after charging: Directors emoluments 1,430 1,430 Other staff costs 123,483 114,784 Retirement benefit schemes contributions (excluding directors) 5,531 3,826 Total staff costs 130,444 120,040 Amortisation of prepaid lease payments 315 312 12 Cost of inventories recognised as expenses 310,931 305,716 Depreciation of property, plant and equipment 5,587 5,261 Net exchange loss 4,597 and after crediting: Interest income 52 108 Gain on disposal of property, plant and equipment 15 16 Net gain on fair value changes on derivative financial instruments 公 13 740 Net exchange gain 54
Interim Report 2014 中期報告 6. DIVIDENDS 6. Six months ended 30 June 6 306 2014 2013 HK$ 000 HK$ 000 Final dividend paid during the period: 2013 final dividend HK1.5 cents per share (2012: HK5.0 cents) Interim dividend declared subsequent to period end: 2014 interim dividend HK1.0 cent per share (2013: HK3.5 cents) 期 期 2013 期 1.5 2012 5.0 12,375 41,250 期 中期 2014 中期 1.0 2013 3.5 8,250 28,875 The Board has declared that an interim dividend of HK1.0 cent (2013: HK3.5 cents) per share for the six months ended 30 June 2014 to shareholders whose names appear in the Register of Members on 19 August 2014. 2014 6 30 6 中期 1.0 2013 3.5 2014 8 19 7. EARNINGS PER SHARE 7. 13 The calculation of the basic earnings per share for the periods is based on the following data: 期 Six months ended 30 June 6 306 2014 2013 HK$ 000 HK$ 000 Profit for the period for the purpose of basic earnings per share 期 21,097 40,085 Number of Shares Number of shares Number of ordinary shares for the purpose of basic earnings per share 825,000,000 825,000,000 Diluted earnings per share is not presented because there were no dilutive ordinary shares in issue for both periods. 期
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 8. ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT 8. During the period, the Group spent approximately HK$6.8 million (2013: HK$3.9 million) on property, plant and equipment to expand its operation. 集團 680 2013 390 9. INVENTORIES 9. At At 30.06.2014 31.12.2013 HK$ 000 HK$ 000 Raw materials 47,356 43,249 Work in progress 59,821 45,244 Finished goods 11,640 21,787 118,817 110,280 10. TRADE AND OTHER RECEIVABLES 10. 14 The Group generally allows its trade customers an average credit period ranged from 7 to 90 days. 集團 7 90 Included in the balance are trade and bills receivables of approximately HK$161,348,000 (31.12.2013: HK$117,929,000). The aged analysis of trade and bills receivables based on the invoice date at the end of the reporting period is as follows: 161,348,000 31.12.2013 117,929,000 At At 30.06.2014 31.12.2013 HK$ 000 HK$ 000 Not exceeding 30 days 30 84,315 58,155 31 to 60 days 31 60 57,350 39,598 61 to 90 days 61 90 18,805 19,950 Over 90 days 90 878 226 161,348 117,929 Prepayment and deposits 13,651 7,987 Other receivables 618 451 175,617 126,367
Interim Report 2014 中期報告 11. TRADE AND OTHER PAYABLES 11. Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period obtained for trade purchases is 7 to 60 days. 期 7 60 Included in trade and other payables are trade and bills payables of approximately HK$78,406,000 (31.12.2013: HK$67,701,000). The aged analysis of trade and bills payables based on the invoice date at the end of the reporting period is as follows: 78,406,000 31.12.2013 67,701,000 期 At At 30.06.2014 31.12.2013 HK$ 000 HK$ 000 Not exceeding 30 days 30 54,662 31,763 31 to 60 days 31 60 14,361 26,233 61 to 90 days 61 90 3,451 3,489 Over 90 days 90 5,932 6,216 78,406 67,701 Other payables and accruals 32,986 36,346 15 111,392 104,047
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 12. SHARE CAPITAL 12. Number of ordinary shares Amount HK$ 000 Ordinary shares of HK$0.1 each: 0.1 Authorised: At 1 January 2013, 30 June 2013, 1 January 2014 and 30 June 2014 Issued and fully paid: At 1 January 2013, 30 June 2013, 1 January 2014 and 30 June 2014 2013 1 12013 6 302014 1 1 2014 6 30 5,000,000,000 500,000 2013 1 12013 6 302014 1 1 2014 6 30 825,000,000 82,500 13. CAPITAL COMMITMENTS 13. 16 At At 30.06.2014 31.12.2013 HK$ 000 HK$ 000 Capital expenditure contracted for but not provided for in the condensed consolidated financial statements in respect of the acquisition of property, plant and equipment 1,272 253
Interim Report 2014 中期報告 14. CONNECTED AND RELATED PARTY TRANSACTIONS 14. The Group had significant transactions with related parties, some of which are also deemed to be connected persons pursuant to the Listing Rules, during the period as follows: 中 期 Six months ended 30 June 6 306 2014 2013 Name of party Relationship Nature of transactions HK$ 000 HK$ 000 Connected parties Capital Nation Investments Limited A company beneficially owned and controlled by Ms. Lee Rosanna Man Lai, a daughter of Mr. Lee Wan Keung Corrugated cardboard and carton boxes purchased 720 805 17 Lee & Man Realty Investment Limited A company beneficially owned and controlled by Mr. Lee Wan Keung Licence fee paid 1,268 972
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 15. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS 15. Fair value of the Group s financial assets and financial liabilities that are measured at fair value on a recurring basis Some of the Group s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used), as well as the level of the fair value hierarchy into which the fair value measurements are categorised (levels 1 to 3) based on the degree to which the inputs to the fair value measurements is observable. 集團 公 公 公 公 Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active market for identified assets or liabilities; 公 18 Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and 公 Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). 公
Interim Report 2014 中期報告 15. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (CONTINUED) 15 Relationship of Significant unobservable Financial assets/ Fair value Valuation technique(s) and key unobservable input(s) to fair financial liabilities Fair value as at hierarchy input(s) input(s) value / 30.06.2014 31.12.2013 HK$ 000 HK$ 000 (1) Structured foreign currency forward contract classified as derivative Assets 201 Assets 405 Level 2 Discounted cash flow Future cash flows are estimated based on forward exchange rates N/A N/A financial instruments in (from observable forward exchange the condensed rates at the end of the reporting consolidated statement period) and contracted forward of financial position rates, discounted at a rate that reflects the credit risk of various counterparties. (1) 中 201 405 期 報告期 期 期 期 19 There were no transfers between 3 levels in both periods. 期 The directors of the Company consider that the carrying amounts of financial assets recognised in the condensed consolidated financial statements approximate their fair values. 報 16. REVIEW OF INTERIM ACCOUNTS 16. The condensed consolidated interim financial statements are unaudited, but have been reviewed by the Audit Committee. 中期 報
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 Business Review and Prospects 業務回顧及展望 INTERIM DIVIDEND The Board has declared an interim dividend of HK1.0 cent per share for the six months ended 30 June 2014 to shareholders whose names appear on the Register of Members on 19 August 2014. It is expected that the interim dividend will be paid around 27 August 2014. 2014 6 30 6 1.0 2014 8 19 2014 8 27 CLOSURE OF REGISTER OF MEMBERS The Register of Members of the Company will be closed from 15 August 2014 to 19 August 2014, both days inclusive, during which period no transfer of shares in the Company can be registered. In order to qualify for the interim dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company s Branch Share Registrars, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen s Road East, Hong Kong, for registration no later than 4:00 p.m. on 14 August 2014. 公司 2014 8 152014 8 19 理 手 有 文 有 2014 8 144 公司 183 22 有限公司 理 手 BUSINESS REVIEW 20 For the six months ended 30 June 2014, the Group recorded a revenue of approximately HK$386 million, decreased by 2.4% over the last corresponding period; and a net profit for the period of approximately HK$21 million, decreased by 47.4% over the same period last year. Gross profit margin and net profit margin were 19.5% and 5.5%, representing a reduction of 3.2 and 4.6 percentage points respectively as compared to the last corresponding period. 2014 6 306 集團 3.86 2.4% 2,100 47.4% 19.5% 5.5%, 3.2 4.6 Due to the slowdown of the growth of the global economy and the keen competition from South East Asia manufacturers, the returns from orders reduced and the Group s profit for the period declined significantly. As to the production cost, even in the face of significant increase in the labour costs in the PRC, the Group maintained its market share and competitiveness in the handbag industry through effective and stringent cost control and the implementation of production process optimisation project. 集團 集團 集團 手袋 有
Interim Report 2014 中期報告 Business Review and Prospects 業務回顧及展望 PROSPECTS It is expected that the external economy would continue to be affected by the above factors. Also, in view of the severe shortage of labour in the PRC and the surging labour costs, it will be full of challenge for the handbag business in the second half of the year. Nevertheless, the Group will strive to diversify its product designs, strengthen the development of high-end products, enhance the production processes, reinforce internal controls and implement tight control over the cost in order to seek for reasonable profit for the Group. 期 21
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 Management Discussion and Analysis 管理層討論及分析 RESULTS OF OPERATION Revenue and net profit attributable to owners of the Group for the six months ended 30 June 2014 was HK$386 million and HK$21 million, representing a decrease of 2.4% and 47.4% respectively, as compared to HK$396 million and HK$40 million respectively for the last corresponding period. The basic earnings per share was HK2.6 cents for the period ended 30 June 2014 and HK4.9 cents for the last corresponding period. 2014 6 306 集團 公司 有 3.86 0.21 3.96 0.40 2.4% 47.4%2014 6 30 2.6 4.9 Revenue The Group recorded revenue of approximately HK$386 million for the six months ended 30 June 2014, decreased by 2.4% as compared to HK$396 million for the same period last year. As the growth of the global economy was slowed down and the keen competition from South East Asia manufacturers, the revenue for the current period declined. 集團 2014 6 306 3.863.96 2.4% Cost of sales 22 Cost of sales increased from HK$306 million for the last corresponding period to HK$311 million for the six months ended 30 June 2014, showing a increase of approximately 1.7%. Furthermore, the percentage of cost of sales to the total revenue for the period was 80.5%, increased by 3.2 percentage points as compared to 77.3% for the last corresponding period. Such increase was mainly attributable to the significant increase in the labour costs for the first half of 2014. 集團 3.06 2014 6 306 3.111.7% 集團 80.5% 77.3%3.2 2014 Selling and distribution expenses 及分 Selling and distribution expenses incurred for the six months ended 30 June 2014 was HK$13.8 million, increased by HK$0.9 million as compared to HK$12.9 million for the last corresponding period, representing a increase of approximately 7.6%, mainly driven by strengthening of product design and the development of mid-high end products, which resulted in higher sampling costs and testing charges. 2014 6 30 6 1,380 1,29090 7.6%
Interim Report 2014 中期報告 Management Discussion and Analysis 管理層討論及分析 General and administrative expenses General and administrative expenses incurred for the six months ended 30 June 2014 was HK$40.5 million, increased by HK$0.2 million as compared to HK$40.3 million for the last corresponding period, representing an slight increase of approximately 0.5%. The administrative expenses for the period were kept at a stable level. 2014 6 306 4,050 期 4,030 200.5% 期 Finance costs Interest expenses incurred for the six months ended 30 June 2014 was HK$0.16 million, remained stable as compared to HK$0.17 million for the last corresponding period. 2014 6 306 16 期 17 LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE The total shareholders equity of the Group as at 30 June 2014 was approximately HK$280 million (31.12.2013: HK$272 million). As at 30 June 2014, the Group had current assets of approximately HK$374 million (31.12.2013: HK$283 million) and current liabilities of approximately HK$207 million (31.12.2013: HK$122 million). The current ratio was 1.81 and 2.33 as at 30 June 2014 and 31 December 2013, respectively. 2014 6 30 2.80 31.12.2013 2.723.74 31.12.2013 2.83 2.07 31.12.2013 1.22 2014 6 30 2013 12 31 1.81 2.33 23 The Group generally finances its operations with internally generated cash flow and credit facilities provided by its principal bankers in Hong Kong. As at 30 June 2014, the Group had outstanding bank borrowings of approximately HK$95 million (31.12.2013: HK$17 million). These bank loans were secured by corporate guarantees provided by the Company and its subsidiaries. As at 30 June 2014, the Group maintained bank balances and cash of approximately HK$79 million (31.12.2013: HK$43 million). The Group s net debtto-equity ratio (total bank borrowings net of cash and cash equivalents over shareholders equity) was 0.06 as at 30 June 2014 and compared to the net cash-to-equity ratio (cash and cash equivalents net of total bank borrowings over shareholders equity) of 0.09 as at 31 December 2013. 2014 6 30 9,500 31.12.2013 1,700 2014 6 307,900 31.12.2013 4,300 2014 6 300.062013 12 31 0.09 The Group has sufficient cash and available banking facilities to meet its commitments and working capital requirements.
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 Management Discussion and Analysis 管理層討論及分析 CAPITAL COMMITMENTS As at 30 June 2014, the Group had capital expenditure contracted for but not provided in the consolidated financial statements in respect of the acquisition of property, plant and equipment in the amount of approximately HK$1.3 million. 2014 6 30 集團 130 EMPLOYEES As at 30 June 2014, the Group had a workforce of around 4,000 people. The Group maintains a good relationship with its employees, and provides them with proper training and competitive compensation and incentives. The staffs are remunerated based on their work performance, professional experience and prevailing market situation. Remuneration packages comprise salary and bonuses based on individual merits. 2014 6 30 集團 4,000 集團 PURCHASE, SALE OR REDEMPTION OF THE COMPANY S LISTED SECURITIES 24 During the six months ended 30 June 2014, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company s listed securities. 2014 6 306 公司 公司 公司
Interim Report 2014 中期報告 Other Information 其他資料 SHARE OPTION SCHEME The Company s share option scheme (the Scheme ) was also adopted pursuant to a resolution passed on 18 May 2011 for the purpose of providing incentives to directors and eligible persons. The Scheme will remain in force for a period of 10 years from adoption of such scheme and will expire on 17 May 2021. No share option was granted under the Scheme since its inception. 2011 5 18 102021 5 17 ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES Other than disclosed in the Share Option Scheme above, at no time during the period was the Company, its holding company, or any of its subsidiaries and fellow subsidiaries, a party to any arrangements to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. 期 DIRECTORS INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES As at 30 June 2014, none of the directors or the chief executives, or any of their associates, had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations which had to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the Securities and Future Ordinance ( SFO ), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code ), to be notified to the Company and the Stock Exchange. 2014 6 30 中 期 XV7 8 期 352 25
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 Other Information 其他資料 SUBSTANTIAL SHAREHOLDERS As at 30 June 2014, shareholders (other than directors and chief executives of the Company) who had interests and short positions in the shares and underlying shares of the Company which have been disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO were as follows: 2014 6 30 公司 公司 有 XV2 3 公司 336 公司 Long positions Ordinary shares of HK$0.1 each of the Company 公司 0.1 Number of Percentage of the issued ordinary issued share capital Name of shareholder Capacity shares held of the Company Full Gold Trading Limited Beneficial owner (note) 618,750,000 75.00% ( Full Gold ) 有 26 Note: The entire issued share capital of Full Gold is owned by Mr. Lee Wan Keung as to 55% and Mr. Lee Man Yan as to the remaining 45%. Ms. Wai Siu Kee and Ms. Lee Man Ching, as directors of the Group, are the directors of Full Gold. Full Gold 有 55% 文 有 45% 集團 文 Full Gold Other than disclosed above, as at 30 June 2014, the Company has not been notified by any person (other than directors or chief executives of the Company) who had an interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO. PURCHASE, SALE OR REDEMPTION OF THE COMPANY S LISTED SECURITIES Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company s listed securities during the six months ended 30 June 2014. 文 2014 6 30 公司 公司 公司 有 XV2 3 公司 336 公司 2014 6 306 公司 公司 公司
Interim Report 2014 中期報告 Other Information 其他資料 MODEL CODE FOR SECURITIES TRANSACTIONS The Company has adopted the Model Code as a code of conduct regarding directors securities transactions. All the members of the Board have confirmed, following specific enquiry by the Company that they have complied with the required standard as set out in the Model Code throughout the six months ended 30 June 2014. CORPORATE GOVERNANCE The Company has complied with the Corporate Governance Code and Corporate Governance Report (the Code ) as set out in Appendix 14 of the Listing Rules throughout the six months ended 30 June 2014 except where stated and explained below. The Group has an Executive Chairman who also acts as the chief executive officer. The Executive Chairman with the assistance of the Group s senior management team oversees and manages the Group s business. Other functions normally undertaken by a chief executive officer of a company are delegated to members of the Group s senior management team. This structure deviates from the code provision A2.1 of Code that requires the roles of the chairman and the chief executive officer to be separate and not performed by the same individual. The Board has considered this matter carefully and decided not to adopt the code provision. The Board believes that the current management structure has been effective in facilitating the operation and development of the Group and its business for a considerable period of time and that the necessary checks and balances consistent with sound corporate governance practices are in place. Accordingly, the Board does not consider it necessary to change the current management structure. However, the Board will review the management structure from time to time to ensure it continues to meet these objectives. 2014 6 306 期 2014 6 306 14 報告 A2.1 27 AUDIT COMMITTEE The Audit Committee of the Company comprised of three independent non-executive directors namely, Mr. Heng Victor Ja Wei, Mr. So Wing Keung and Mr. Tsang Hin Man Terence. The Audit Committee has reviewed with management the accounting principles and practices adopted by the Group and discussed internal control and financial reporting matters including the review of the Group s unaudited interim results for the six months ended 30 June 2014. 報 中 2014 6 30 6 中期
Lee & Man Handbags Holding Limited 理文手袋集團有限公司 Other Information 其他資料 REMUNERATION COMMITTEE To comply with the Code, a remuneration committee had been established with specific written terms of reference which deal clearly with its authority and duties. The members of the remuneration committee comprises Mr. Heng Victor Ja Wei, Mr. So Wing Keung and Mr. Tsang Hin Man Terence. All members of the remuneration committee are independent non-executive directors. 公司 限 文 NOMINATION COMMITTEE To comply with the Code, a nomination committee had been established with specific written terms of reference which deal clearly with its authority and duties. The members of nomination committee comprises Ms. Wai Siu Kee (chairman), Mr. Heng Victor Ja Wei, Mr. So Wing Keung and Mr. Tsang Hin Man Terence, of which three members are independent non-executive directors. 公司 限 文 28 On behalf of the Board Wai Siu Kee Chairman Hong Kong, 31 July 2014 2014 7 31
LEE & MAN HANDBAGS HOLDING LIMITED 8th Floor, Liven House 61-63 King Yip Street Kwun Tong, Kowloon, Hong Kong Tel: 2319 9888 Fax: 2319 9333 理文手袋集團有限公司香港九龍觀塘敬業街 61-63 號利維大廈 8 樓電話 :2319 9888 傳真 :2319 9333