Financial Performance - Revenue decreased due to COVID-19 restrictions, impacting the entire fiscal year 2021 compared to only half of the previous year[19] - Revenue decreased by 11.0% from $13.2 million in FY2020 to $11.8 million in FY2021, primarily due to lower orders from corporate customers affected by COVID-19[21] - Gross profit reduced by 7.3% from $3.1 million in FY2020 to $2.9 million in FY2021, directly linked to the decline in revenue[21] - Profit decreased by 38.0% from $397,000 in FY2020 to $246,000 in FY2021, mainly due to lower gross profit[21] - Sales of tissue products decreased by $1.5 million, representing a decrease of 13.5% due to the effects of COVID-19[43] - Sales of hygiene-related products decreased by $0.1 million, representing a decrease of 10.7%, while sales of other products increased by $0.2 million, representing an increase of 24.0%[43][44] - Cost of sales decreased from $10.1 million to $8.9 million, representing a decrease of 12.2%[47] - Selling and distribution expenses decreased from $1.5 million to $1.4 million, representing a decrease of 4.6%[47] - Administrative expenses decreased from $1.6 million to $1.5 million, representing a decrease of 4.2% due to cost control measures[47] Operational Adjustments - Increased purchase costs were attributed to a surge in worldwide ocean freight charges[19] - The company adjusted selling prices aggressively throughout the year, resulting in a higher gross profit margin compared to the previous year[19] - Ocean freight costs increased by $193,000 in FY2021 despite lower quantities of products purchased, impacting operational costs significantly[33] - Operating cash flow reduced by $385,000 in FY2021 compared to the previous year due to lower revenue, but the company maintained positive cash flow from operations[33] Supply Chain and Delivery - Delivery to customers was not affected as the company adhered strictly to Singapore government's COVID-19 safety directives[20] - The supply chain remained uninterrupted, with close monitoring of the COVID-19 status of vendors[20] Assets and Liabilities - The company has net current assets of $2.7 million as of September 30, 2021, ensuring sufficient funds for working capital requirements[33] - As of September 30, 2021, the Group had total assets of $21.0 million, down from $26.2 million in 2020, with total liabilities of $5.0 million (2020: $10.5 million) and shareholders' equity of $16.0 million (2020: $15.7 million)[49] - The current ratio as of September 30, 2021, was 1.7 times, an increase from 1.6 times in 2020[49] - Cash and cash equivalents as of September 30, 2021, were $3.7 million, slightly down from $3.9 million in 2020[49] - Total interest-bearing bank borrowings as of September 30, 2021, were $0.1 million, compared to $0.2 million in 2020, with an annual interest rate of 3%[49] - The gearing ratio as of September 30, 2021, was 0.01, significantly lower than 0.25 in 2020[49] Future Outlook - With a COVID-19 vaccination rate exceeding 85% in Singapore, the company is optimistic about revenue recovery as commercial activities resume[24] - The company continues to evaluate development opportunities to strengthen its competitive advantage and market position[25] - The company remains committed to achieving sustainable growth and delivering greater returns to shareholders[26] - The company is optimistic about achieving sustainable growth and will continue to evaluate development opportunities to strengthen its competitive advantage[42] Capital Expenditure and Investments - The Group committed to capital expenditure of $0.5 million for the purchase of production machinery as of September 30, 2021, down from $1.4 million in 2020[52] - The company upgraded its conversion line for jumbo roll tissue production, fully utilizing allocated proceeds of $6,200,000, which represents 20.7% of the total investment[65] - A new conversion line for hand towel production was acquired, with an investment of $1,300,000, accounting for 4.3% of the total investment, but no activities were reported due to delays[65] - The extension of the existing factory building and purchase of lifting equipment involved an investment of $19,500,000, fully utilized, representing 65.0% of the total investment[65] - Total capital allocated for various projects amounted to $30,000,000, with 100% utilization reported[65] - The completion of the factory extension was delayed due to COVID-19, impacting the commercial production objectives for both jumbo roll tissues and hand towels[68] - The unutilized net proceeds from the investment have been placed with a licensed bank in Singapore for interest-bearing deposits[66] Corporate Governance - The company has adopted and complied with the CG Code during the Relevant Year to ensure proper regulation of business activities and decision-making processes[97] - The Board consists of seven Directors, including four executive Directors and three independent non-executive Directors[121] - The Board is responsible for overall management, including resource allocation and strategic decisions[128] - The Company maintains high standards of corporate governance, reviewing policies and compliance with legal requirements[118] - The Board has established specific Committees with defined authority and duties[119] - The Company has received annual confirmations of independence from all independent non-executive Directors, meeting GEM Listing Rules requirements[127] - The independent non-executive directors have an initial term of three years, subject to termination under certain circumstances as specified in their appointment letters[142] Board Composition and Diversity - The company recognizes the importance of board diversity, considering factors such as gender, age, and professional experience in board composition[144] - The Nomination Committee is responsible for reviewing board composition and assessing the independence of independent non-executive directors[143] - The board diversity policy aims to create a competitive advantage and improve governance and performance[144] Remuneration and Performance - The Group's remuneration policy is designed to attract and retain high-quality staff, offering competitive packages based on corporate results, individual performance, and market conditions[177] - During the Relevant Year, the remuneration of senior management was structured with a basic salary and performance bonus, with three individuals earning between HK$0 to HK$1,000,000 and one individual earning between HK$1,000,001 to HK$1,500,000[183] - The Group's performance-based remuneration is regularly reviewed to ensure competitiveness and alignment with market standards[177] - The Remuneration Committee assessed the performance and remuneration packages of executive Directors and senior management during the Relevant Year[180]
日光控股(08451) - 2021 - 年度财报