Financial Performance - The group recorded revenue of approximately HKD 80,000,000 for the year ended March 31, 2022, an increase of about 27.6% compared to HKD 62,700,000 for the previous year[9]. - The group sold approximately 142,800 products, including about 121,700 bridesmaid dresses, 7,700 wedding dresses, and 13,300 special occasion garments[9]. - Revenue from the United States accounted for approximately 46.2% of total revenue for the year ended March 31, 2022, down from 78.6% in the previous year[9]. - The gross profit margin improved from a gross loss margin of 8.4% for the year ended March 31, 2021, to a gross profit margin of 5.0% for the year ended March 31, 2022[9]. - The net loss for the year ended March 31, 2022, was approximately HKD 25,100,000, a significant reduction from a loss of HKD 44,700,000 in the previous year[9]. - Other income increased by approximately 223.1% to HKD 4,200,000 for the year ended March 31, 2022, primarily due to government subsidies and recovery of previously written-off debts[24]. - Sales and distribution expenses rose by approximately 22.0% to HKD 6,100,000 for the year ended March 31, 2022, driven by increased advertising and promotion costs[26]. - Financing costs decreased by approximately 31.2% to HKD 1,100,000 for the year ended March 31, 2022, due to a reduction in average bank borrowings[28]. - As of March 31, 2022, the group's cash and cash equivalents were approximately HKD 52.8 million, a significant increase from HKD 0.5 million on March 31, 2021[31]. - The current ratio improved to approximately 2.4 times as of March 31, 2022, compared to 0.8 times on March 31, 2021, primarily due to increased cash and reduced bank loans[32]. - The debt-to-equity ratio decreased to 23.8% as of March 31, 2022, down from 78.8% a year earlier, attributed to reduced bank loans and increased equity from share placements[32]. Business Strategy and Opportunities - The group is actively seeking new business opportunities to diversify its revenue sources and reduce risks due to ongoing trade disputes and the impact of COVID-19[12]. - The company is negotiating with a well-known discount retailer in China to develop procurement and distribution business, aiming to expand its customer base in China[12]. - The company has started developing an online business platform for selling fashion apparel since November 2020[16]. - The group has launched accessory sales business during the year ended March 31, 2022[16]. Corporate Governance - The board of directors consists of experienced members, including independent non-executive directors with over 16 years and 30 years of experience in direct sales and insurance management respectively[64][65]. - The company has adopted the corporate governance code as a basis for its governance practices, ensuring compliance with all applicable provisions during the reporting period[72]. - The board holds at least four regular meetings annually, with all directors actively participating either in person or via electronic communication[83]. - The financial director has over 15 years of experience in accounting and auditing, ensuring robust financial management and reporting[68]. - The company has a structured approach to governance, aimed at protecting shareholder interests and enhancing corporate value[72]. - The board is committed to regular reviews of directors' contributions and time commitments to ensure effective governance[79]. - The company has established a code of conduct for securities trading, ensuring compliance among directors and employees[73]. - The board includes a diverse range of expertise, with members holding significant positions in various sectors, enhancing strategic decision-making[80]. - The company emphasizes transparency and accountability in its operations, aligning with best practices in corporate governance[72]. - The independent non-executive directors play a crucial role in overseeing the company's strategic decisions and performance[78]. - The board of directors attended 10 out of 10 meetings, with the chairman and CEO, Mr. Zhuang Shuo, present at all meetings[84]. - The audit committee held two meetings during the reporting period, reviewing the annual performance and interim financial results[97]. - All independent non-executive directors confirmed their independence according to the listing rules[89]. - The company has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific written terms of reference[96]. - The audit committee consists of four independent non-executive directors, ensuring compliance with financial reporting and internal control systems[97]. - The remuneration committee is chaired by Mr. Liu Guanyie, comprising four independent non-executive directors[99]. - The company maintains appropriate insurance coverage for directors and senior management against legal actions arising from corporate activities[93]. - All directors are required to undergo continuous professional development to fulfill their responsibilities effectively[93]. - The company’s governance practices align with the corporate governance code, ensuring a minimum of three independent non-executive directors on the board[89]. - The board believes that the dual role of chairman and CEO held by Mr. Zhuang Shuo provides strong leadership for effective business decision-making[87]. - The compensation committee held two meetings during the reporting period to review the company's compensation policies and structures, as well as the remuneration of directors and senior management[104]. - The company has adopted a board diversity policy, recognizing that a diverse board can enhance corporate governance and board effectiveness[111]. - The nomination committee evaluated the independence of independent non-executive directors and made recommendations regarding their re-election[109]. - The board is aware that all members are of a single gender and plans to appoint at least one director of a different gender by December 31, 2024, to comply with listing rules[112]. - The nomination committee will report annually on the composition of the board based on diversity perspectives and measurable targets[112]. - The company has established a director nomination policy to ensure a balanced board in terms of skills, experience, and diversity perspectives[114]. - The compensation committee's responsibilities include reviewing and approving compensation arrangements for executive directors and senior management[104]. - The company aims to ensure that any compensation payments are fair and reasonable, particularly in cases of termination or dismissal[104]. - The nomination committee consists of one executive director and four independent non-executive directors, with the chairman also serving as the committee chair[107]. Risk Management and Compliance - The company has established a risk management framework involving the board, audit committee, and risk management working group to oversee risk management and internal control systems[120]. - The audit fees paid to Deloitte for the reporting period totaled HKD 1,789,000, which includes HKD 1,100,000 for audit services and HKD 412,000 for non-audit services related to rights issues[127]. - The board has conducted an annual review of the effectiveness of the risk management and internal control systems, covering financial, operational, and compliance monitoring[121]. - The company has a clear governance structure and policies to manage various operational risks[120]. - The company has adopted risk management policies to identify, assess, and manage significant risks[120]. - The company has established a shareholder communication policy to ensure that shareholder views and concerns are appropriately addressed[134]. - The board of directors has reviewed the effectiveness of the shareholder communication policy during the reporting period[134]. - The company has a policy for handling and disclosing inside information in compliance with the Securities and Futures Ordinance and listing rules[123]. - The board is responsible for preparing the financial statements and overseeing the financial reporting process[124]. Employee Welfare and Training - The total employee cost for the year ending March 31, 2022, was approximately HKD 32.2 million, an increase from HKD 29.3 million in the previous year[38]. - As of March 31, 2022, the total number of employees in the group was 262, all of whom were full-time employees, a decrease from 295 employees in the previous year[170]. - The overall employee turnover rate was 14.1%, with a breakdown of 11.9% for males and 16.0% for females[172]. - The turnover rate for employees aged 25 or below was 60.0%, while for those aged 40 to 49, it was 7.7%[172]. - The group has implemented a comprehensive internal human resources policy to regulate recruitment, dismissal, promotion, and other employee benefits[168]. - The company has signed formal labor contracts with all employees to protect their rights and interests, ensuring compliance with local labor laws[172]. - The group emphasizes employee welfare by providing competitive compensation packages that exceed local minimum wage standards[173]. - The company has a total of 240 employees in mainland China, down from 276 the previous year, while the number of employees in Hong Kong increased from 19 to 22[170]. - The group has established rigorous policies to ensure fair treatment of all employees, promoting diversity and inclusion in the workplace[168]. - The company strictly adheres to all relevant occupational health and safety laws, with no violations reported during the reporting period[178]. - The group is committed to continuous investment in employee training and development opportunities to enhance their skills and organizational capabilities[170]. - The COVID-19 vaccination rate among employees reached 98%, with only 4 employees exempted for medical reasons[187]. - The company implemented regular disinfection of facilities as part of its COVID-19 measures[187]. - There were no reported incidents of work-related injuries or fatalities over the past three fiscal years[182]. - The company has established a systematic reporting mechanism for employees to report safety-related issues[182]. - A comprehensive training program was conducted to enhance employees' awareness of health and safety regulations[188]. - The company provided various training courses to improve employees' skills in production processes and quality control[191]. - All employees are required to wear personal protective equipment, such as masks, during their shifts[181]. - The company conducted a fire drill to assess workers' ability to respond to emergencies[188]. - An internal pandemic response team was established to monitor the COVID-19 situation and implement necessary measures[186]. - The company encourages employees to report any suspected workplace hazards to management for timely action[182]. - 100% of employees participated in the training program, with male employees at 45.0% and female employees at 55.0%[193]. - The average training hours per employee was 11.6 hours, with male employees averaging 14.7 hours and female employees averaging 9.1 hours[195]. - The average training hours for employees aged 25 or below increased from 20.2 hours to 28.1 hours year-on-year[195]. - The training hours for employees aged 40 to 49 remained stable at 10.1 hours[195]. Sustainability and ESG Initiatives - The company aims to improve the accuracy of ESG data disclosure and enhance transparency in ESG performance[139]. - The board is committed to monitoring ESG matters, including health and safety, product responsibility, and compliance[144]. - The company emphasizes the importance of sustainable materials and designs in response to increasing consumer demand for sustainability[145]. - The company will continue to actively address identified ESG issues, including product quality and customer service[145]. - The company aims to increase the use of biodegradable materials and minimize waste generation[145]. - The company expects to enhance its impact on the environment and community by providing responsible products and excellent services[149]. - The ESG committee is responsible for assessing and determining ESG-related risks and opportunities, with a focus on effective risk management and internal controls[150]. - The committee meets formally every six months to ensure the proper execution of ESG measures within specified timelines[152]. - The company emphasizes stakeholder engagement and has established multiple channels for effective communication with stakeholders, including shareholders, employees, suppliers, and the community[153]. - An importance assessment was conducted to identify sustainability issues that may impact the company, utilizing feedback from both internal and external stakeholders[158]. - Key sustainability issues identified include packaging material usage, energy consumption and efficiency, and employee recruitment and dismissal[165]. Supplier Management - The total number of suppliers identified by the company is 139, with 62 suppliers located in China[199]. - The company has established a supplier code of conduct that includes multiple environmental and social risk indicators[200]. - The number of suppliers in the United States is 10, while there are 4 suppliers in South Korea[199]. - The company aims to ensure supplier compliance with sustainable and ethical practices through a series of pre-qualification assessments[200]. - The company plans to explore the feasibility of incorporating internationally recognized standards into supplier evaluation criteria[200].
嘉艺控股(01025) - 2022 - 年度财报