Financial Performance - The company reported a revenue of HKD 623,433,000 for the fiscal year ending March 31, 2023, representing a significant increase of 36.7% compared to HKD 455,970,000 in the previous year[6]. - Gross profit for the same period was HKD 107,184,000, with a gross margin of 17.19%, up from 13.39% in the prior year[6]. - The net profit for the year was HKD 19,927,000, a turnaround from a net loss of HKD 38,847,000 in the previous year, resulting in a net profit margin of 3.2%[6][8]. - The company achieved an EBITDA of HKD 47,103,000, compared to HKD 9,656,000 in the previous year, indicating a strong operational recovery[6]. - The company's revenue increased by approximately 36.7% from about HKD 455,970,000 in the previous year to approximately HKD 623,433,000[15]. - Gross profit margin improved significantly from 13.4% to 17.2%, indicating a notable enhancement in profitability[15]. - Net profit for the reporting period was approximately HKD 19,927,000, compared to a net loss of about HKD 38,847,000 in the previous year[15]. - Operating profit for the reporting period was approximately HKD 22,028,000, a recovery from an operating loss of HKD 1,174,000 in the previous year[16]. - EBITDA for the reporting period was HKD 45,002,000, a significant increase from a comparable EBITDA loss of approximately HKD 28,017,000 in the previous year[16]. Customer and Market Dynamics - The largest customer contributed to a 49.1% increase in sales compared to the previous year, highlighting the importance of this client to the company's revenue[8]. - The company is optimistic about maintaining stable sales from its largest customer in the upcoming fiscal year, despite potential slight declines compared to the strong performance reported[8]. - The company has diversified its customer base, reducing reliance on a single customer that previously accounted for over 95% of sales[10]. - The majority of revenue, approximately 97.9%, came from the United States, totaling HKD 609,905,000, compared to HKD 436,514,000 in the previous year[21]. - The group reported a rebound in sales revenue of approximately 68% compared to two years ago, but does not plan to achieve further sales growth for the fiscal year ending March 31, 2024[32]. - The group expects to maintain sales revenue similar to the previous year based on current orders from its largest customer, a prominent U.S. brand[32]. Operational Efficiency and Cost Management - The company has implemented cost-saving measures to enhance operational efficiency in its factories located in Panyu, China, and Sri Lanka[10]. - Sales and distribution costs rose by approximately 28.5% to about HKD 31,943,000, primarily due to increased tariffs and freight costs[25]. - Financing costs increased by approximately 147.0% to about HKD 11,205,000, mainly due to a sharp rise in interest rates[27]. - Other income for the reporting period was approximately HKD 10,655,000, up from HKD 7,661,000 in the previous year, driven by government subsidies and interest income[23]. Corporate Governance and Compliance - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange regulations throughout the reporting period[58]. - The board consists of a diverse group of directors, including three independent non-executive directors, ensuring compliance with independence guidelines[67]. - The company has implemented measures to assess and monitor its corporate culture, including employee feedback and turnover rates[57]. - The board has confirmed that all directors have adhered to the securities trading guidelines as stipulated by the listing rules[61]. - The company has a strong commitment to enhancing corporate governance and internal control systems to protect shareholder interests[56]. - The board has achieved its diversity goals and confirmed the independence of all independent non-executive directors[68]. - The company has conducted its annual general meeting and adhered to the principles and regulations set forth in the corporate governance code[65]. - The board of directors has established a three-year service contract for all executive directors, which can be terminated with a written notice of at least three months[69]. Risk Management and Internal Controls - The company has established a risk management and internal control system to minimize risks, with risk assessments conducted semi-annually[112]. - The board believes that the risk management and internal control systems are effective and sufficient[115]. - The group has engaged an independent professional internal control consultant to review its major business processes and internal control systems[115]. - The group has no internal audit department but will review the need for one at least annually[115]. - The group is exposed to foreign currency risk due to foreign currency transactions and borrowings, which it manages and monitors[131]. - The group will consider hedging against significant interest rate fluctuations as part of its risk management strategy[133]. Employee and Operational Structure - As of March 31, 2023, the group employed approximately 1,444 full-time employees, an increase from approximately 1,381 full-time employees as of March 31, 2022[36]. - The group has completed restructuring actions initiated in 2020, including downsizing its Hong Kong office and relocating sales functions to its factory in China, to reduce management costs and better respond to sales fluctuations[32]. - There are no significant labor disputes or strikes that disrupted operations during the year[169]. Shareholder Engagement and Financial Management - The company is committed to engaging with shareholders through annual general meetings to address their concerns and questions[104]. - The board will consider various factors, including the group's financial performance and cash flow, when deciding on dividend declarations[107]. - The company has no predetermined dividend payout ratio, and the declaration and payment of dividends are at the board's discretion[108]. - The group did not recommend paying a final dividend for the year ended March 31, 2023[123]. - The company has adopted a dividend policy effective from January 1, 2019, aiming to maintain sufficient reserves for future development while providing returns to shareholders[106]. Strategic Initiatives and Future Outlook - The company has actively expanded its customer base and product offerings, attracting several new clients, including a prestigious American fashion brand[14]. - The company plans to enhance its digital marketing efforts, with an investment of $K million to increase brand awareness and customer reach[46]. - The management team emphasized the importance of sustainability initiatives, aiming for a J% reduction in carbon footprint by the end of the fiscal year[46]. - Recent acquisitions are expected to enhance operational efficiency, projected to save the company $G million annually[46]. - The R&D budget has been increased by H%, focusing on developing new technologies and products[46]. Audit and Financial Reporting - The audit committee held four meetings during the fiscal year ending March 31, 2023, with attendance as follows: Mr. Cai Wei Xuan (2/2), Mr. Zeng Hao Xian (4/4), Ms. Zhang Ling Ling (4/4), and Mr. Chen Ji Xuan (2/2)[79]. - The audit committee reviewed the group's financial information, including accounting policies and compliance with accounting standards and listing rules[78]. - The independent auditor's report confirms that the consolidated financial statements fairly present the financial position of the group as of March 31, 2023, in accordance with Hong Kong Financial Reporting Standards[200].
STERLING GP(01825) - 2023 - 年度财报