Financial Performance - The company's total revenue for the fiscal year 2023 was approximately HKD 365.6 million, a decrease of about 22.8% from HKD 473.4 million in the fiscal year 2022[10]. - Sales of hair care products decreased by approximately 21.0% to about HKD 328.7 million, primarily due to a decline in demand in the US market[10]. - The company's sales in the US market dropped by approximately 55.5% to about HKD 104.0 million, compared to HKD 233.7 million in the previous fiscal year[10]. - Conversely, sales in the Japanese market increased by approximately 19.6% to about HKD 220.6 million, up from HKD 184.4 million[10]. - The group's gross profit decreased by approximately HKD 7.8 million (6.5%) to about HKD 112.4 million, while the gross profit margin increased by approximately 5.3 percentage points to about 30.7%[17]. - Profit attributable to equity holders increased by approximately 7.5% to about HKD 64.2 million, compared to HKD 59.7 million in the previous fiscal year[12]. - Net profit attributable to equity holders increased by approximately HKD 4.5 million (7.5%) to about HKD 64.2 million, with a net profit margin rising by approximately 5.0 percentage points to about 17.6%[21]. Cost Management - The gross profit margin increased by approximately 5.3% to about 30.7%, compared to 25.4% in the previous fiscal year, due to cost control measures and a decrease in direct labor costs[11]. - Administrative expenses slightly decreased by approximately HKD 1.8 million (4.8%) to about HKD 35.6 million[18]. - Financing costs recorded approximately HKD 1,000, a significant decrease from HKD 24,000 in the previous fiscal year, as the group had no bank borrowings since June 2022[19]. - Income tax expenses decreased by approximately HKD 0.5 million (4.0%) to about HKD 12.1 million, with an effective tax rate of approximately 15.8%[20]. - The company will maintain strict cost control and streamline operations to improve operational efficiency[14]. Cash and Debt Position - The overall financial condition of the company remains stable, with no bank borrowings reported[7]. - As of March 31, 2023, the group maintained cash and bank balances of approximately HKD 247.1 million, up from HKD 172.2 million a year earlier[23]. - The group had no bank borrowings as of March 31, 2023, compared to approximately HKD 0.3 million a year earlier, resulting in a debt-to-equity ratio of zero[26][27]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.015 per share and a special dividend of HKD 0.008 per share, pending shareholder approval[36]. - The board proposed a final dividend of HKD 0.015 per share and a special dividend of HKD 0.008 per share, subject to shareholder approval[68]. Management and Governance - The company has a strong management team with extensive experience in production and operational management, particularly in its wholly-owned subsidiary Shenzhen Keli Electric Co., Ltd., which is crucial for maintaining production efficiency[44]. - The independent non-executive directors bring over 20 years of experience in corporate finance, accounting, and auditing, enhancing the company's governance and strategic oversight[46]. - The leadership team is committed to maintaining high standards of corporate governance and financial transparency, which is essential for investor confidence and long-term sustainability[46]. - The company has established compliance oversight through its management team, ensuring adherence to regulations[60]. - The company has a diverse board with members holding various professional qualifications, enhancing governance[52]. - The company has established a corporate governance policy that is regularly reviewed to ensure compliance with the corporate governance code[157]. - The board is responsible for overall management, strategy planning, and compliance with legal and regulatory requirements[160]. Market Strategy and Development - The company plans to continue investing in R&D to enhance its technical team's capabilities and to introduce high-value products to explore new revenue sources[13]. - The company remains committed to its strategy of developing its own brand products and pursuing an Own Brand Manufacturing (OBM) model in potential markets[13]. - The company is focused on expanding its market presence and developing new products and technologies to meet consumer demands and enhance competitiveness in the industry[39]. - The company is actively pursuing strategies for market expansion and potential mergers and acquisitions to strengthen its market position and drive future growth[39]. - The company reported a significant increase in overall sales and marketing strategies, with a focus on business development led by Chairman and CEO Mr. Li Shuye, who has over 35 years of experience in the small household appliances and personal care appliances industry[39]. Employee Relations - The company maintained a stable relationship with its 541 employees, with no significant labor disputes reported during the fiscal year[82]. - Total employee costs for the period were approximately HKD 68.1 million, down from HKD 96.4 million in the previous year, with a total of 541 employees[34]. Risk Management and Internal Controls - The risk management system identified no significant risks during the 2022/23 risk assessment[192]. - The internal control system aligns with the COSO 2013 framework, ensuring operational effectiveness and compliance with laws[193]. - The board has conducted an annual review of the effectiveness of risk management and internal control procedures through the audit committee, with no significant improvements required[197]. - An external independent internal control consultant was appointed to review the internal control procedures at both the company and business levels[197]. Shareholder Information - The company reported a significant reliance on its top five customers, with sales accounting for 99.4% of total revenue in the fiscal year 2023, down from 99.8% in fiscal year 2022[87]. - The largest customer contributed 35.5% of total revenue in fiscal year 2023, a decrease from 54.0% in fiscal year 2022[87]. - Procurement from the top five suppliers accounted for 42.9% of total purchases in fiscal year 2023, up from 34.1% in fiscal year 2022[87]. - The largest supplier represented 12.7% of total purchases in fiscal year 2023, compared to 11.6% in fiscal year 2022[87]. Stock Options and Incentives - The stock option plan adopted on August 21, 2020, allows for a total of 125,000,000 shares to be issued, representing approximately 9.78% of the company's issued share capital as of March 31, 2023[114]. - No stock options have been granted under the stock option plan since its adoption up to the report date[106]. - The stock option plan aims to reward selected eligible individuals for their contributions to the group's growth and development[107].
科利实业控股(01455) - 2023 - 年度财报