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MANAGEMENT DISCUSSION AND ANALYSIS (continued)
Liquidity and financial resources

The Group’s total equity and total equity per share as at 30 September 2019 were HK$1,101
million (31 March 2019: HK$1,329 million) and HK$1.52 (31 March 2019: HK$1.84)
respectively.

As at 30 September 2019, we had cash and deposits of HK$102 million. After deducting
bank and other borrowings of HK$358 million, we had net borrowings of HK$256 million
(31 March 2019: net cash of HK$93 million). Following the settlement of Christmas orders in
December, our cash is expected to improve.

As at 30 September 2019, our inventory was HK$651 million (31 March 2019: HK$480
million). We take a cautious approach to monitor the inventory level especially during this
environment with uncertainty.

Trade receivables as at 30 September 2019 were HK$585 million (31 March 2019: HK$511
million). It is our policy to deal with creditworthy customers and to adopt a prudent credit
policy, and we have been closely monitoring credit risk.
Trade payables as at 30 September 2019 were HK$197 million (31 March 2019: HK$94
million).

Capital expenditure on fixed assets during the six months ended 30 September 2019 was
HK$5 million (2018: HK$17 million). As at 30 September 2019, we had capital commitments
contracted but not provided for in respect of property, moulds, plant and machinery and
renovation amounting to HK$6,870,000 (31 March 2019: HK$8,815,000).

Due to peg-rate system, we have limited exposure to trade-related foreign exchange risk
as substantially all of our sales, purchases and borrowings are denominated in United
States dollars and Hong Kong dollars. Adhering to the policy of not engaging in currency
speculation, there was no gain or loss from speculative activities during the reporting period.

Employees
As at 30 September 2019, the Group had approximately 1,100 employees in Hong Kong, the
PRC and Taiwan. Remuneration packages are generally structured by reference to market
terms and individual qualifications. Salaries and wages are normally reviewed on an annual
basis based on performance appraisals and other relevant factors. We also provide other
benefits including medical insurance, provident fund and education subsidies to all eligible
staff.

Interim Report 2019 ALCO HOLDINGS LIMITED 25