Financial Performance - The company's revenue for the fiscal year ending March 31, 2022, was approximately HKD 34,757,000, a decrease of about 9.4% from HKD 38,350,000 in 2021[9]. - Gross profit decreased by approximately 12.3% to about HKD 13,435,000, down from HKD 15,325,000 in the previous year[9]. - The company reported a net loss of approximately HKD 1,007,000, compared to a net profit of HKD 9,573,000 in 2021[9]. - For the fiscal year ending March 31, 2022, the repair service revenue increased to approximately HKD 34,503,000, a slight rise of about 1.2% from HKD 34,105,000 in the previous year[22]. - Sales of accessories and support services dropped approximately 94.0% to about HKD 254,000, down from HKD 4,245,000, primarily due to the termination of a smartphone manufacturer's screen protection program[22]. - The cost of sales decreased by approximately 7.4% to about HKD 21,322,000, down from HKD 23,025,000, attributed to reductions in both parts and labor costs[24]. - Other income and gains for the year were approximately HKD 3,511,000, down from HKD 9,341,000, mainly due to the absence of prior year gains from currency exchange and government subsidies[26]. - Administrative expenses increased by approximately 52.0% to about HKD 13,168,000, up from HKD 8,661,000, primarily due to costs associated with warehouse expansion[27]. - The net loss for the fiscal year ending March 31, 2022, was approximately HKD 1,007,000, a decline of about 110.5% compared to a profit of HKD 9,573,000 in the previous year[29]. - The group generated net cash of approximately HKD 1,633,000 from operating activities during the year[41]. Strategic Initiatives - The company acquired a property in Mong Kok to establish a repair center, which is expected to reduce rental expenses and generate rental income from leasing to third parties[10]. - The company anticipates a gradual recovery in the economic and market outlook post-COVID-19, despite ongoing challenges and competition[12]. - The company is focusing on enhancing service quality and operational efficiency while exploring business and investment opportunities for diversification[12]. - The company plans to implement cost management and productivity improvement measures to reduce operating expenses and achieve operational excellence[16]. - The company aims to provide comprehensive training to its professional teams to continuously improve service quality and explore new business opportunities[17]. - The company emphasizes the importance of strategic business investments to strengthen its core competitive advantages and maintain industry leadership[16]. Market Trends - The smartphone shipment volume in 2021 showed a year-on-year growth of 5.7%, with expectations for healthy growth in 2022 due to increased consumer demand for 5G and new designs[20]. - The company remains cautiously optimistic about the future prospects of the industry, despite the challenging business environment[12]. Governance and Management - Zhang Jingfeng has been appointed as CEO since August 2014, responsible for managing customer relations and exploring new business opportunities[58]. - The company has over 40 years of experience in the telecommunications industry, with a focus on comprehensive service provision[54]. - The company has a strong management team with extensive experience in telecommunications and related sectors[59][60][63]. - The board includes independent non-executive directors with diverse backgrounds in manufacturing, trade, and telecommunications[59][60]. - The company has been actively involved in strategic planning and marketing strategies to enhance sales and corporate objectives[55][56]. - The management team is committed to implementing administrative policies and overseeing human resources and legal operations[56]. - The company has a focus on expanding its market presence and enhancing its service offerings[58]. - The board's composition reflects a balance of executive and independent non-executive directors, ensuring effective governance[59][60]. - The company has adhered to the Corporate Governance Code, with the exception of certain deviations disclosed in the "Board Functions" section[69]. - The board consists of three non-executive directors, one executive director, and three independent non-executive directors[71]. - The company has established an audit committee, a remuneration committee, and a nomination committee, each with specific written terms of reference[68]. - The chairman and the CEO roles are separated, with Mr. Zhang Jing Shi serving as chairman and Mr. Zhang Jing Feng as CEO[79]. - The management team is led by experienced senior management, authorized by the board to execute the group's policies and strategies[73]. - The company has a clear policy for the appointment and re-election of directors, ensuring that non-executive directors are appointed for a fixed term of three years[75]. - Independent non-executive directors have confirmed their independence, complying with the relevant listing rules[78]. - The company has implemented a standard code for securities transactions by directors, ensuring compliance throughout the fiscal year[70]. - The board is responsible for considering and approving the overall business plans and strategies of the group[73]. - The management is required to provide monthly updates to the board regarding any significant changes in the company's status and prospects[73]. - All directors participated in continuous professional development, with each director completing 3 training sessions as of March 31, 2022[84]. - The Audit Committee, established on May 2, 2013, includes three independent non-executive directors and is responsible for overseeing financial reporting and risk management[87]. - The Remuneration Committee also consists of three independent non-executive directors and reviews the overall remuneration policy for all directors and senior management[90]. - The Nomination Committee evaluates the independence of all independent non-executive directors and reviews the board's structure and diversity policy[95]. - The company has adopted a dividend policy that allows for four general dividends per year, with special dividends possible in years of strong earnings[98]. - The company ensures that the remuneration of directors and senior management is regularly reviewed based on market levels and the group's performance[93]. - The Audit Committee's responsibilities include reviewing the financial controls and internal management systems of the group[91]. - The company has a clear nomination policy to ensure a balanced skill set and diversity on the board[97]. - The company provides appropriate insurance coverage for directors against legal actions related to their corporate activities[85]. - The company aims to balance providing adequate returns to shareholders through dividends while supporting future growth[98]. - The board adopted a diversity policy for its members on November 7, 2013, focusing on measurable goals including gender, age, cultural and educational background, and professional experience[99]. - For the year ending March 31, 2022, the board held 4 meetings, with all directors attending 100% of the meetings[101]. - The auditor's fees for the year ending March 31, 2022, totaled HKD 890,000, with HKD 650,000 for audit services and HKD 240,000 for non-audit services[104]. - The board believes the internal control system is effective and sufficient based on the review conducted for the year ending March 31, 2022[105]. Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) report outlines the company's commitment to sustainable development principles and corporate social responsibility during the reporting period from April 1, 2021, to March 31, 2022[118]. - The ESG report focuses on the company's core business in Hong Kong, which includes mobile and personal electronic product repair and refurbishment services, as well as the sale of related accessories[119]. - The company has identified eight significant ESG issues based on internal stakeholder surveys and external assessments, which are detailed in the ESG report[129]. - The company strictly adheres to local laws and regulations regarding emissions control, including the Water Pollution Control Ordinance and the Waste Disposal Ordinance[132]. - The company does not engage in any manufacturing processes and does not own any vehicles, resulting in no industrial wastewater or significant emissions issues[132]. - The board of directors emphasizes the importance of good ESG strategies to enhance investment value and provide long-term returns to stakeholders[123]. - The company is committed to improving its environmental performance and reducing its environmental impact through various policies[131]. - The company will continue to monitor developments in ESG reporting requirements in Hong Kong and set multiple performance goals and indicators as needed[124]. - The company provides monthly training to employees on ESG, customer service, and product handling to enhance the quality of ESG-related matters[123]. - The group has reduced water consumption at the original headquarters from 133 cubic meters in 2020/21 to 72 cubic meters in the current year, achieving a water consumption density of 1.71 cubic meters per employee, down from 2.18 cubic meters per employee[134]. - The group has implemented waste reduction strategies, encouraging suppliers to avoid single-use packaging and promoting the reuse of materials among employees[135]. - The group has set energy-saving goals and installed energy-efficient lighting, requiring employees to turn off lights and air conditioning after office hours[137]. - The group has taken measures to enhance employee awareness of green operations, including reminders to conserve resources and reduce paper consumption[138]. - The group regularly identifies and assesses climate-related risks, acknowledging the financial impacts of climate change on its operations[139]. - The group has established internal guidelines for extreme weather events to prioritize employee safety and asset protection[142]. - The group adheres to labor laws regarding employment standards, ensuring non-discrimination and protecting employee rights[144]. - The group has implemented a comprehensive performance evaluation system for employees, which will influence salary adjustments and promotions[146]. - No work-related fatalities or lost workdays due to injuries were reported in the past three years[150]. - The group has adopted strict COVID-19 prevention measures, including office disinfection every three hours and mandatory mask-wearing for employees and visitors[151]. - The group emphasizes employee training, organizing internal courses and encouraging participation in external seminars to enhance knowledge and efficiency[152]. - The group has established a supplier approval process and conducts annual performance audits to ensure quality and compliance with environmental and social responsibilities[155]. - All consumables are subject to inspection and recording to ensure product quality, with non-compliant products being isolated and returned to suppliers[156]. - The group has not received any complaints related to product and service quality during the year[159]. - The group promotes a culture of work-life balance and health among employees, organizing various activities to enhance employee belonging[146]. - The group prioritizes eco-friendly products and local suppliers to reduce carbon footprint during procurement[155]. - The group has implemented corrective measures and risk management procedures to address customer complaints effectively[159]. - Total greenhouse gas emissions increased to 69 tons CO2 equivalent in 2021/22 from 56 tons in 2020/21, representing a 23% increase[166]. - Scope 2 emissions from energy indirect sources rose to 64 tons CO2 equivalent, up from 51 tons, marking a 25% increase[166]. - The total energy consumption reached 165 MWh, an increase of 18.7% from 139 MWh in the previous year[166]. - The number of employees increased to 132 in 2021/22 from 83 in 2020/21, reflecting a growth of 59%[168]. - The employee turnover rate for males was 130% in 2021/22, significantly higher than 31% in 2020/21[168]. - The average training hours per employee decreased to 3 hours for males and 2 hours for females, compared to 5 hours and 2 hours respectively in the previous year[168]. - The total amount of plastic used increased to 2,719 kg in 2021/22 from 1,355 kg in 2020/21, a rise of 100.5%[166]. - The total hazardous waste generated remained constant at 1 ton for both years, while non-hazardous waste increased to 11 tons from 8 tons[166]. - The number of full-time employees rose to 71 from 55, while part-time employees increased to 61 from 28[168]. - The company has implemented a security plan in warehouses, including a 24-hour CCTV monitoring system to protect customer privacy[160]. - The company reported a total of 31-34 pages dedicated to environmental protection policies and performance indicators related to emissions and waste management[169]. - Key performance indicator A1.2 indicates direct and energy indirect greenhouse gas emissions, with specific density metrics provided in the report[171]. - The total amount of hazardous waste generated, as per key performance indicator A1.3, is documented along with applicable density figures[171]. - The report outlines the total water consumption and density under key performance indicator A2.2, emphasizing resource efficiency[171]. - The company has established energy efficiency targets and the steps taken to achieve these goals are detailed in key performance indicator A2.3[171]. - Key performance indicator B1.1 provides a breakdown of total employees by gender, employment type, age group, and region, highlighting workforce diversity[174]. - The report includes data on employee turnover rates categorized by gender and age group under key performance indicator B1.2[174]. - The company has implemented occupational health and safety measures, with key performance indicator B2.3 detailing the adopted practices and monitoring methods[174]. - The report emphasizes compliance with relevant laws and regulations affecting employment practices and workplace safety[174]. - The company has not set specific emission reduction targets due to minimal emissions generated, as noted in key performance indicator A1.5[171]. Shareholder and Market Engagement - The company emphasizes communication with shareholders and investors, providing multiple channels for inquiries and feedback[108]. - The company aims to provide high levels of disclosure and financial transparency to shareholders and investors through regular reports and announcements[109]. - The company has a non-competition agreement with major shareholders to prevent competition with its business[191]. - The top five customers accounted for approximately 72.2% of the group's revenue for the year ended March 31, 2022, with the largest customer contributing about 36.0%[194]. - The top five suppliers represented around 99.9% of the confirmed inventory costs for the year, with the largest supplier accounting for approximately 52.6% of the costs[194]. - As of March 31, 2022, the company's distributable reserves amounted to HKD 64,734,000, a slight decrease from HKD 65,300,000 in 2021[195]. - The independent non-executive directors confirmed that the controlling shareholders complied with commitments during the year ended March 31, 2022, with no reported violations[193]. - The company continues to monitor market trends and business opportunities as part of its business planning and development functions[193]. Upcoming Events - The annual general meeting is scheduled for August 18, 2022, with a suspension of share transfer registration from August 15 to August 18, 2022[190].
电讯首科(03997) - 2022 - 年度财报