Financial Performance - For the fiscal year ending March 31, 2023, the company's revenue decreased by approximately 1.2% to about HKD 605.1 million from HKD 612.2 million in the previous year[8]. - The gross profit margin improved to approximately 17.1%, up from 16.3% in the previous year, primarily due to changes in product mix and better cost control[10]. - The company recorded a net profit of approximately HKD 22.7 million, a significant turnaround from a net loss of HKD 48.0 million in the previous year[10]. - General and administrative expenses increased to approximately HKD 75.5 million, up from HKD 65.9 million, mainly due to higher R&D costs[16]. - The group's revenue for the year was approximately HKD 605.1 million, a decrease of about HKD 7.1 million or 1.2% compared to HKD 612.2 million in the previous year[20]. - Sales cost for the year was approximately HKD 501.8 million, a decrease of about HKD 10.4 million or 2.0% compared to HKD 512.3 million in the previous year, with the sales cost as a percentage of total revenue at approximately 82.9%, down from 83.7%[21][22]. - Gross profit for the year was approximately HKD 103.3 million, an increase of about HKD 3.4 million or 3.4% compared to HKD 99.9 million in the previous year, resulting in a gross margin of approximately 17.1%, up from 16.3%[23]. - Other income for the year was approximately HKD 8.6 million, compared to a loss of approximately HKD 4.0 million in the previous year, primarily due to a net exchange gain of about HKD 7.8 million from RMB depreciation[25]. - Financial expenses for the year were approximately HKD 8.5 million, an increase from HKD 5.5 million in the previous year, attributed to higher average balances of bank loans and lease liabilities[28]. - The company's attributable profit for the year was approximately HKD 22.7 million, compared to HKD 13.3 million in the previous year, reflecting improved financial performance[30]. Business Strategy and Operations - The company plans to invest in a new production base in Malaysia to better serve clients relocating their operations to Southeast Asia[11]. - The overall business environment remains uncertain due to geopolitical tensions, high inflation, and rising interest rates, which are expected to continue impacting the global economy[17]. - The company aims to optimize operations and implement strict cost control measures to strengthen its financial position[11]. - Revenue from clients in the network and data storage sector increased due to accelerated digitalization and increased internet activity post-pandemic[16]. - The company anticipates ongoing challenges in the manufacturing sector in China due to de-globalization and rising production costs[11]. - The company is committed to exploring long-term and sustainable new business opportunities to create greater value for customers and shareholders[12]. Corporate Governance - The board of directors consists of six members, including two executive directors, one non-executive director, and three independent non-executive directors, maintaining compliance with listing rules[54]. - The company has implemented a board diversity policy, ensuring at least one female member on the board, which has been achieved as of the report date[57]. - The board is committed to high standards of corporate governance, having adhered to the corporate governance code as per the listing rules for the year ending March 31, 2023[51]. - The roles of the chairman and CEO are separated, with distinct responsibilities outlined and approved by the board[61]. - The board held four meetings and one annual general meeting during the year, with all directors attending all meetings[68]. - The audit committee reviewed the consolidated financial statements for the year ended March 31, 2022, and the interim financial statements for the six months ended September 30, 2022[74]. - The remuneration committee held two meetings to review the remuneration policies and approved the salaries and bonuses for executive directors and senior management[83]. - The company adopted a standard code for securities trading by directors, confirming full compliance by all directors during the year[69]. - The nomination committee reviewed the board's structure, size, and composition, and assessed the independence of independent non-executive directors[79]. - The audit committee consists of three independent non-executive directors, with the chairman possessing appropriate professional qualifications and experience in accounting[71]. - The company has established a remuneration committee to recommend overall remuneration policies for all directors and senior management[80]. - The board has adopted a practice of holding at least four regular meetings annually, approximately once per quarter[66]. - The company ensures that all directors receive meeting agendas and documents at least three days prior to regular board meetings[66]. - The board reviewed significant matters, including the annual consolidated financial statements and dividend recommendations during board meetings[66]. - The board has adopted a nomination policy to ensure a balanced skill set, experience, and diverse perspectives within the board[86]. - The selection criteria for nominees include commitment of time, integrity, industry achievements, efficiency in board duties, and diversity[90]. - The external auditor's fees for the year ending March 31, 2023, totaled HKD 1,194,000, including HKD 850,000 for audit services and HKD 270,000 for interim review services[94]. - The board is responsible for overseeing the risk management and internal control systems, which are deemed effective and sufficient as of March 31, 2023[95]. - The company has implemented a policy for handling and disclosing inside information to ensure accuracy and timeliness[96]. - Shareholders holding at least 10% of the voting shares can request a special general meeting within two months of submission[98]. - Shareholders can submit inquiries to the board through the company secretary at any time[99]. Environmental, Social, and Governance (ESG) Initiatives - The company has established a sustainable development strategy that includes integrating environmental factors into operations and enhancing corporate social responsibility performance[108]. - The report covers the group's operations in Suzhou, China, focusing on precision metal manufacturing, with a comparison of ESG performance data from the sold Shenzhen and Shanghai units as of December 2021[107]. - The board has reviewed the effectiveness of the shareholder communication policy and deemed it effective as of March 31, 2023[103]. - The company has set up a review process to ensure the accuracy and reliability of the information contained in the ESG report[108]. - The ESG report is prepared according to the guidelines set out in the listing rules, focusing on key performance indicators that are quantifiable and comparable[110]. - The company aims to balance environmental, market, and social advantages while addressing global sustainability trends[108]. - The importance assessment identified key ESG issues such as greenhouse gas emissions, energy efficiency, and employee health and safety[113]. - Total carbon dioxide emissions for the fiscal year ending March 31, 2023, were approximately 4,937 tons, a reduction of about 4,886 tons or 49.7% compared to the previous year[115]. - Indirect greenhouse gas emissions (Scope 2) accounted for 93% of total emissions in the fiscal year ending March 31, 2023, compared to 95% in the previous year[117]. - The total amount of harmless waste disposed of was approximately 1,777 tons for the fiscal year ending March 31, 2023, down from 2,283 tons in the previous year[119]. - The use of recyclable packaging materials increased to approximately 18% of total sales products for the fiscal year ending March 31, 2023, up from 6% in the previous year[126]. - Indirect energy consumption decreased by approximately 5.73 million kWh or 50.2% to about 5.69 million kWh for the fiscal year ending March 31, 2023[122]. - Direct energy consumption decreased by approximately 0.6 million kWh or 27.3% to about 1.6 million kWh for the fiscal year ending March 31, 2023[122]. - Total water resource consumption decreased by approximately 15.3 thousand tons or 34.2% to about 29.4 thousand tons for the fiscal year ending March 31, 2023[124]. - The company has installed numerous solar panels on factory rooftops to reduce electricity consumption and greenhouse gas emissions[128]. - The company aims to continuously reduce greenhouse gas emissions and improve the efficiency of electricity and water resource usage in the future[119]. - The company has implemented various measures to save energy and reduce greenhouse gas emissions, including the introduction of solar power and smart energy-saving switches[119]. Employee and Labor Relations - As of March 31, 2023, the total number of full-time employees in the group was 974, a decrease from 1,053 in 2022[46]. - The gender ratio among employees is approximately 2.1:1, with 659 male employees and 315 female employees as of March 31, 2023, compared to 750 male and 303 female employees in 2022[57]. - The company provides ongoing training to employees to enhance their skills and product knowledge[46]. - The company has established a labor union to protect employee rights and interests, facilitating discussions on improving employee welfare[133]. - The average training hours per employee increased to 58% for operational staff in 2023, up from 47% in 2022, indicating a focus on employee development[138]. - The average training hours for management staff increased to 16% in 2023 from 12% in 2022, reflecting an emphasis on leadership development[138]. - The proportion of employees aged 35 and below was 67% in 2023, a decrease from 72.3% in 2022, suggesting an aging workforce trend[134]. - Employee turnover rate decreased to 19.0% in 2023 from 23.4% in 2022[156]. - The total number of trained employees decreased to 13,792 in 2023 from 19,561 in 2022[156]. - The number of workdays lost due to occupational injuries decreased to 233 days in 2023 from 278 days in 2022[156]. - The percentage of trained employees in senior and middle management increased to 8.4% in 2023 from 6.2% in 2022[156]. - The number of male employees decreased from 750 in 2022 to 659 in 2023, a decline of approximately 12%[154]. - The company has implemented strict supplier management policies, requiring suppliers to pass rigorous audits to be included in the qualified supplier list[142]. - The company has maintained ISO 9001 certification since 1995, ensuring adherence to international quality management standards[143]. - All returned products in 2023 were related to quality defects, with no significant health and safety issues reported, demonstrating a focus on product responsibility[145]. Community Engagement and Social Responsibility - The company has engaged in community investment initiatives, including hiring disabled residents and supporting local educational programs[152]. - The company aims to strengthen partnerships with charitable organizations to promote sustainable development in the community[151]. - The company has focused on community investment, ensuring business activities consider community interests[167]. - The company is actively involved in protecting consumer data and privacy, with policies and monitoring methods described[167]. - The company has a strategic focus on mergers and acquisitions, with recommendations provided to the board[171]. - The company has engaged in community participation to understand local needs and ensure business activities align with community benefits[167]. Financial Policies and Risks - The company reported no final dividend for the year, consistent with the previous year, and no interim dividend was paid[190]. - As of March 31, 2023, the company's distributable reserves amounted to approximately HKD 257.6 million, consisting of retained earnings of about HKD 231.5 million and share premium of approximately HKD 26.1 million[198]. - The company did not make any donations during the year ending March 31, 2023, compared to HKD 175,000 in 2022[200]. - The company is committed to providing high-quality products and actively managing customer relationships to expand its customer base and enhance loyalty[187]. - The company faces various financial risks, including foreign exchange risk, interest rate risk, credit risk, and liquidity risk[183]. - The company has adopted a dividend policy that considers various factors, including financial performance and cash flow needs[192]. - The company emphasizes corporate social responsibility as a key element of its sustainable development strategy, engaging in community and charitable activities[182]. - The company operates under strict compliance with relevant environmental regulations in its mainland China operations[185]. - The company has established close and long-term relationships with its suppliers to ensure the delivery of quality raw materials[188].
KFM金德(03816) - 2023 - 年度财报