Annual Report 2016
15
MANAGEMENT DISCUSSION AND ANALYSIS
Inventories
Inventories increased from HK$515.3 million as at March 31, 2015 to HK$535.5 million as at March 31,
2016. The inventory turnover days maintained at 2.0 months.
Cash Flow
As at March 31, 2016, the Group had a working capital of HK$320.6 million, which included a cash
balance of HK$482.6 million, compared to a working capital of HK$324.0 million, which included a
cash balance of HK$306.0 million at March 31, 2015. The increase in cash by HK$176.6 million was
attributable to the net effect of cash inflow of HK$33.5 million from operating activities and HK$163.2
million from financing activities and cash outflows of HK$26.8 million in investing activities.
Cash inflow from operating activities was mainly attributable to an increase in operating cash inflow.
Cash inflow from financing activities was attributable to an increase in trust receipt loans and bank
borrowings due to increase of purchasing activities and increase in cash buffer.
Cash outflow in investing activities was mainly attributable to a further investment in the associated
company in July 2015 of HK$24.5 million.
Borrowing and Banking Facilities
As at March 31, 2016, bank borrowings of HK$202.0 million (March 31, 2015: HK$169.0 million) were
unsecured and repayable in quarterly or monthly installments ending in FY2018.
Bank borrowings bore interest at a weighted average effective rate of 2.91% for fixed rate borrowing and
2.30% for variable rate borrowings as at March 31, 2016.
As at March 31, 2016 trust receipt loans were unsecured, repayable within one year and bore an effective
interest rate of 1.72% to 2.89% per annum. As at March 31, 2016, the Group had unutilised banking
facilities of HK$488.8 million (March 31, 2015: HK$529.0 million).
As at March 31, 2016, trade receivables amounted to HK$61.0 million (March 31, 2015: HK$25.8 million)
were transferred to banks by discounting those receivables on a full recourse basis. As the Group had
not transferred the significant risks and rewards relating to these receivables, it continued to recognise
the full carrying amount of the receivables and had recognised the cash received on the transfer as a
secured borrowing amounted to HK$48.8 million (March 31, 2015: HK$20.6 million).
