Financial Performance - The Group's revenue for the year 2021/22 was HK$390,446,000, a decrease of 7% from HK$420,475,000 in 2020/21, while the overall profit was HK$30,274,000 compared to a loss of HK$28,651,000 in the previous year[5][10] - The company's revenue for the year ended March 31, 2022, was HK$390,446,000, a decrease of 7% compared to HK$420,475,000 in the previous year[18] - Gross profit decreased by 15% to HK$60,627,000 from HK$71,358,000, resulting in a gross profit margin of 16%, down from 17%[18] - Loss from operations improved by 42% to HK$13,064,000 from HK$22,457,000 in the previous year[18] - Net profit attributable to equity shareholders was HK$30,665,000, a significant turnaround from a loss of HK$27,822,000 the previous year[18] Operational Insights - The core garment business recorded an operational loss of HK$13,064,000, which is 42% better than the previous year's loss of HK$22,457,000[7][11] - The positive results from the Wuxi investment were attributed to favorable cotton and yarn prices and timely adjustments in product mix to meet market demands[8][11] - Manufacturing operations in China performed positively due to a stable production environment, while losses were incurred in Myanmar and Bangladesh, leading to a decision to withdraw investments from those countries[7][11] - The company anticipates a gradual recovery in its core garment business with the opening of U.S. and European markets, although performance from the Wuxi investment is expected to decline due to rising cotton prices affecting gross profit margins[9][12] Market Outlook - The outlook for the coming year remains cautious due to ongoing challenges such as the Covid-19 pandemic, the Russia-Ukraine war, and high inflation rates, with no significant improvement expected in the trading environment[9][12] - The Group anticipates weakening domestic and overseas demand in the coming year due to adverse factors such as rising labor and energy costs[27] Financial Position - The company's cash and bank balances decreased by 12% to HK$235,472,000 from HK$266,085,000[18] - Total assets increased by 6% to HK$1,297,318,000 from HK$1,226,564,000, while total liabilities rose by 12% to HK$127,324,000 from HK$113,181,000[18] - The current ratio decreased by 17% to 4.3 times from 5.2 times[18] - The Group did not have any short-term or long-term borrowings as of March 31, 2022 and 2021[27] Shareholder Information - The Group plans to recommend a final dividend of HK2 cents per ordinary share for the year ended March 31, 2022, totaling HK$4,135,000 if approved by shareholders[69] - The aggregate amount of reserves available for distribution to equity shareholders was HK$286,812,000 as of March 31, 2022[70] - The largest customer accounted for 18% of total sales in 2022, down from 19% in 2021, while the top five customers collectively represented 53% of total sales, an increase from 47% in 2021[79] - The largest supplier contributed 9% to total purchases, a slight decrease from 10% in 2021, with the top five suppliers maintaining a consistent 29% of total purchases[79] Corporate Governance - The Company has complied with the Corporate Governance Code throughout the financial year ended 31 March 2022, except for a deviation regarding the specific term for non-executive directors[126] - The Board comprises six executive directors and three independent non-executive directors, with independent directors representing at least one-third of the Board[128] - The Audit Committee consists of three independent non-executive directors and is responsible for reviewing the financial reporting process and internal controls[121] - The Company is committed to high corporate governance standards, emphasizing transparency, accountability, and independence[125] Risk Management - The Group has implemented proactive measures to monitor changes in global economic conditions and has established risk mitigation strategies[48] - The Risk Management Committee is responsible for overseeing the design and implementation of risk management and internal control systems for the Group[168] - The Group's risk management and internal control systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatement or loss[185] Employee Engagement - As of March 31, 2022, the Group employed approximately 1,700 employees, with remuneration packages based on performance and market salary levels[52] - The Group encourages employees to participate in charitable activities through its "YGM Volunteer Team," promoting corporate social responsibility[32] Environmental and Social Responsibility - The Group is committed to upholding high environmental standards during manufacturing and material disposal processes[30] - The Group has not identified any material non-compliance or breach of legislation related to product safety[29] - Charitable donations made by the Group during the year amounted to HK$11,000[71] Audit and Compliance - The auditor issued an unqualified letter regarding the Group's continuing connected transactions in accordance with the Hong Kong Listing Rules[113] - The external consultant engaged for internal audit services reviewed the effectiveness of the internal controls system and reported findings to the Audit Committee[187] - The Company has implemented procedures for handling and disseminating inside information to ensure compliance with Listing Rules and statutory obligations[186]
长江制衣(00294) - 2022 - 年度财报