Economic Impact - The past year was significantly impacted by the fifth wave of the COVID-19 pandemic, particularly affecting industries in Hong Kong and leading to a downturn in the Chinese economy [18]. - The lockdown in Shanghai for over two months severely affected the local economy, marking a turning point for economic deterioration in China [18]. - Rising global interest rates and rapid price increases contributed to a further decline in the sluggish Chinese economy, impacting consumer purchasing desire [18]. Revenue and Profitability - Revenue increased by approximately 9.0% to approximately HK$235,963,000 for the Year from approximately HK$216,485,000 for the Prior Year [37]. - Revenue from sales of ODM toys increased by approximately 6.6% to approximately HK$114,835,000 (2022: approximately HK$107,749,000) [26]. - Revenue from the distribution of imported toys and related products increased sharply by approximately 36.6% to HK$68,645,000 (2022: approximately HK$50,264,000) [28]. - Gross profit increased by approximately 31.2% to approximately HK$45,736,000 for the Year from approximately HK$34,873,000 for the Prior Year [39]. - The profit margin of the sales of ODM toys declined by approximately 29.7%, from 11.1% for the Prior Year to 7.8% for the Year [27]. - Revenue from sales of own licensed toys and related products dropped by 16.0% to approximately HK$49,099,000 (2022: approximately HK$58,472,000) [29]. - New revenue stream from agency services related to engineering projects contributed approximately HK$3,384,000 for the Year [36]. Costs and Expenses - Cost of sales increased by approximately 4.7% to approximately HK$190,227,000 for the Year from approximately HK$181,612,000 for the Prior Year [38]. - Sales cost increased by approximately 4.7% from HK$181,612,000 last year to approximately HK$190,227,000 this year, consistent with revenue growth [42]. - Other income, net decreased by approximately 83.3% to approximately HK$651,000 from approximately HK$3,898,000 last year, primarily due to foreign exchange losses [45]. - Selling expenses increased by approximately 12.0% from HK$8,200,000 last year to approximately HK$9,187,000 this year, mainly due to increased online marketing expenses [46]. - Administrative expenses rose approximately 3.5% from HK$27,036,000 last year to approximately HK$27,993,000 this year [48]. - Finance costs increased by approximately 116.7% to approximately HK$234,000 from approximately HK$108,000 last year, driven by higher mortgage interest and lease liabilities [49]. - Income tax expenses increased by approximately 13.8% to approximately HK$1,861,000 from approximately HK$1,636,000 last year [57]. Investments and Acquisitions - The Group has no definite future plans for material investments and capital assets, aside from those disclosed in the prospectus dated May 18, 2018 [58]. - The Group holds a 30% investment in a joint venture with Grand View Protective Products Limited, with a total investment of HK$10 million for setting up medical face mask production lines [59][60]. - The Group acquired 30% of DongYiQuan Network Technology Co., Ltd. for HK$10,000,000 and 100% of Forever Profits Development Limited for HK$7,000,000, with profit guarantees in place [65][67]. - The profit guarantee for the first year ending on June 30, 2023, remains unconfirmed, with disclosure expected in the first quarterly report [71]. - The company acquired approximately 45% of M.I.P. International Limited for HK$7,950,000, completed on October 26, 2022 [73]. Financial Position - As of March 31, 2023, the Group's gearing ratio was approximately 0.02 times, indicating a sound financial position [78]. - The total staff cost for the year amounted to approximately HK$17,266,000, an increase from approximately HK$15,884,000 in 2022 [81]. - The Group had no significant contingent liabilities as of March 31, 2023 [89]. - The Group's building, with a carrying value of HK$5,892,000, was mortgaged to secure banking facilities as of March 31, 2023 [80]. Corporate Governance - The company is committed to maintaining high standards of corporate governance, complying with all applicable code provisions of the Corporate Governance Code during the year [155]. - The Board will continuously review and improve corporate governance practices to safeguard shareholder interests and enhance group performance [156]. - The company adopted a code of conduct regarding securities transactions by directors, confirming compliance with the required standards during the year [156]. - The Board has appointed non-executive Directors with appropriate management experience to enhance the collective knowledge and skills of the Board [159]. - Independent Non-executive Directors (INEDs) account for 33% of the Board, ensuring independent judgment on strategic issues [166]. - The Group has adopted a Board diversity policy, considering factors like gender, age, and professional experience to enhance performance quality [159]. - The Board has established mechanisms for Directors to seek external independent advice to enhance decision-making credibility [170]. - The Board has delegated appropriate management and administrative functions to management while retaining clear oversight responsibilities [181]. Management and Leadership - The Chairman and Chief Executive Officer roles are held by Mr. Li, who has been managing the Group since 2004, providing strong leadership [173]. - All directors participated in ongoing professional development as per code provision A.6.5, ensuring they remain updated on significant changes affecting the Group [177]. - The Board held a total of ten meetings during the year, with attendance rates for executive directors ranging from 87.5% to 100% [190]. - The Board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, to assist in fulfilling its duties [182]. Audit and Remuneration Committees - The Audit Committee consists of three independent non-executive Directors, including Ms. Chow Chi Ling Janice as Chairlady, Mr. Yu Pui Hang, and Mr. Tung Man [195]. - The Audit Committee held a meeting on June 30, 2023, to review and approve the annual financial results for the year ended March 31, 2023 [197]. - The Audit Committee is required to meet at least four times a year, and the attendance record shows Mr. Yu Pui Hang attended all four meetings [199]. - The Remuneration Committee also consists of three independent non-executive Directors, with Mr. Yu Pui Hang as Chairman [200]. - The Audit Committee's main duties include overseeing the Group's financial reporting system and internal control systems [195].
佰悦集团(08545) - 2023 - 年度财报