Merchant House International : Appendix 4D and Interim Report

For personal use only

MERCHANT HOUSE INTERNATIONAL LIMITED

ARBN 065 681 138

APPENDIX 4D and

FINANCIAL REPORT

For the half-year ended 30 September 2021

Financial Report	Merchant House International Limited
For the half-year ended 30 September 2021

For personal use only

Contents
Appendix 4D ...........................................................................................................................	2
Directors' Report .....................................................................................................................	4
Consolidated Statement of Profit Or Loss...............................................................................	6
Consolidated Statement of Other Comprehensive Income.....................................................	7
Consolidated Statement of Financial Position ........................................................................	8
Consolidated Statement of Changes in Equity .....................................................................	10
Consolidated Statement of Cash Flows................................................................................	11
Notes to the Financial Report ...............................................................................................	12
Directors' Declaration............................................................................................................	25
Independent Auditor's Review Report ..................................................................................	26

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For personal use only

Financial Report	Merchant House International Limited
For the half-year ended 30 September 2021

Appendix 4D

	Reporting period (current period)	Half-year ended 30 September 2021
	Previous corresponding period	8
	Half-year ended 30 September 2020

Results for announcement to the market

	6 months to	6 months to	Percentage
	30 Sep 2021	30 Sep 2020	Increase /
Results performance		(Restated)	(decrease)
	$'000	$'000
Revenue from ordinary activities	11,321	7,436	52.24
Loss after tax attributable to owners of the Company	(4,215)	(4,770)	(11.64)
Net profit / (loss) attributable to owners of the Company	17,018	(2,400)	809.08

Results for the previous corresponding period have been adjusted to only disclose revenue and loss from continuing operations.

Dividend information

	Amount per	Franked amount
	share	per share
	(cents)	(cents)
Final 2021 dividend per share	Nil	Nil
Special 2021 dividend per share (paid 11 June 2021)	1	Nil
Interim 2022 dividend per share	Nil	Nil

Net tangible assets

		30 Sep 2021		30 Sep 2020
			(Restated)
Net tangible assets per ordinary share (cents)	46.91		35.85

Loss of control over entities

	Name of entities	Date control lost
	Carsan (Shunde) Manufacturing Co Ltd	8
	16 April 2021
	Carsan Trading Co Ltd	16 April 2021

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For personal use only

Financial Report					Merchant House International Limited
For the half-year ended 30 September 2021
Details of associates
			Reporting entity's	Contribution to
			percentage holding	profit / (loss)
			30 Sep	30 Sep			30 Sep	30 Sep
	2021		2020			2021		2020
	%		%			$'000	$'000
Name of associate
Tianjin Jiahua Footwear Company Limited			30.00		30.00			187		445
Tianjin Tianxing Kesheng Leather Products
Company Limited			33.79		33.79			-		-
Jawa (Jiangsu) Textiles Company Limited			-		33.33			-		-
Group's aggregate share of associate entities profit
Profit from ordinary activities before income tax								239		539
Income tax on operating activities								(52)		(94)

Review of Results

Additional information supporting the Appendix 4D disclosure requirements can be found in the Directors' Report and the consolidated financial statements for the half-year ended 30 September 2021. This Interim Financial Report should be read in conjunction with the most recent annual financial report.

Review Report

This Interim Financial Report has been subject to review by the Company's external auditor.

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For personal use only

Financial Report	Merchant House International Limited
For the half-year ended 30 September 2021

Directors' Report

The directors of Merchant House International Limited (the "Company") present their report on the Company and the entities it controlled (the "Group") for the half year ended 30 September 2021.

Directors

The Directors of the Company (the "Directors") during or since the end of the reporting period are:

Ms Loretta Bic Hing Lee

Mr Ian James Burton

Ms Peggy Zi Yin Liao

Ms Xiao Lan Wu

Mr Oliver Hein

Principal activities

The principal activities of the Group are the design, manufacture and marketing of leather boots and shoes and home textile products in United States of America ("USA"). Products distributed by the Group include work boots, waterproof, safety toe footwear and towels. The Group's major sales market is USA.

On 16 April 2021, the Group sold its Chinese investment in Carsan (Shunde) Manufacturing Co. Ltd to focus on its operations in the USA.

Review of operations

The Group has more than 30 years' experience in sourcing, producing, and selling consumer products with an emphasis on footwear and home textile products. The Group is headquartered in Hong Kong and is listed on the Australian Securities Exchange ("ASX"). Where practical, the Group adheres to ASX best practices in relation to corporate governance. As a manufacturing group, there are also stringent practices in place to reduce overall risk from operational activities.

The Group has been engaged in the design, manufacturing and marketing of home textile, seasonal and decorative products, and leather shoes with the major market in the United States of America.

On 16 April 2021, the sale of Carsan (Shunde) Manufacturing Co. Ltd, the Group's its 100% owned subsidiary in China, was completed.

Following the disposal of Carsan, the Group's focus is on the operations of both USA factories.

Since the textile factory in Virginia opened a year ago, labour costs have reduced by 36% as employee's become more skilful in the manufacturing process. Coupled with an increase in sales price, this factory is edging closer to a break-even position.

As we recover from the pandemic, it has been comforting to receive large orders from our long-term, loyal customers since the setup of the Hong Kong and China businesses.

Looking ahead to the second half of the year, exceptional efforts will be aimed at the textile products as well as efficiency improvements on footwear manufacturing.

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