Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social

Environmental Achievements

• Deployed e-leave system for leave application and e-payslip. Extended the use of system for business trip applications.
• Launched the e-Company Brochure to replace the printed brochure being distributed to its customers previously.
• Employees are constantly reminded to reuse single-side used paper, envelopes and carton boxes for internal use.
• Relocated Hong Kong warehouse to ATL Logistics Centre Hong Kong, reducing manual handling injuries.

Social Achievements

• Provided a lactation room in the Hong Kong office.
• Organized company picnics for employees.
• Provided in-house training and subsidization of external training for employees.
• Participated in the Flag Day for the Tung Wah Group of Hospitals.
• Sponsored employees to participate in the Standard Chartered Marathon.

Climate Goals & Targets

Environmental Challenges

• Declining export and Chinese domestic demand for electronics due to US-China trade tensions.
• Depreciation of Renminbi reducing buying power of domestic customers in China.
• Worsening market sentiments with manufacturers trimming down inventory and pushing out orders.

Mitigation Strategies

• Ongoing efforts to develop value-added services to customers in key growth Automotive, Industrial and Home Appliance segments.
• Tightening cost and expenses control.
• Mitigating the credit risk of debtors.
• Maintaining appropriate inventory levels.
• Improving operational efficiency and monitoring the supply chain to avoid potential risks on inventory.

Supply Chain Management

Supplier Audits: Twice a year since 2013

Responsible Procurement

• Suppliers’ statutory qualifications, reputation, previous track record, satisfaction of past cooperation partners, environmental and social standard compliances are considered when selecting new suppliers.
• Quality standards of key suppliers are regularly reviewed (e.g., RoHS, REACH, AEC-Q100/Q200, ISO 9001/14001, TS16949).

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Economic performance
• Anti-corruption
• Labour/management relations
• Product quality
• Customer satisfaction
• Customer privacy
• Information security
• Intellectual property rights

Environmental Achievements

• Upgraded lighting fixtures at headquarters office to LED tubes, resulting in more energy-efficient and environmentally friendly lighting.
• Total GHG emissions dropped by 13% compared to the last reporting period.
• Overall hazardous waste generation dropped by 2% compared to the last reporting period.
• Overall non-hazardous waste generation dropped by 9% compared to the last reporting period.
• GHG emissions from business travels decreased by 4% compared to the last reporting period.
• Generated 24% less paper waste than in the last reporting period.

Social Achievements

• Accredited as the “Good MPF Employer 6 Years” and presented with the e-Contribution Award and the MPF Support Award by the Mandatory Provident Fund Schemes Authority.
• Organized a basketball competition with customers and vendors, a photography competition, yoga activities, and small quizzes.
• Implemented special arrangements in response to the COVID-19 outbreak, including flexible work arrangements, enforcing mask use, temperature monitoring, and banning business travel.
• No work-related fatalities in the past three years, including the reporting year.

Governance Achievements

• Established a rigid governance structure to communicate ESG strategies, review ESG performance and targets, and evaluate ESG risks and opportunities across the Group.
• Implemented a whistleblowing policy to encourage employees to raise concerns about misconduct, malpractice, or irregularities.
• Conducted legal training covering anti-corruption topics (112.5 training hours for 42 employees and directors).
• Complied with all applicable laws prohibiting corruption and bribery of Hong Kong and the PRC.

Climate Goals & Targets

Environmental Challenges

• Global shortage in the supply of selected components, particularly semiconductor chips, leading to disruptions to production schedules and inability to fully capitalize on overwhelming demand.
• Resurgence of the COVID-19 pandemic in China and the country’s strict zero-COVID-19 stance resulting in lockdowns and logistical issues, exacerbating supply chain disruptions.
• Geopolitical conflict in Eastern Europe and ongoing trade tensions between the United States and China impacting consumer sentiment, rising inflation, and higher operating costs.

Mitigation Strategies

• Worked closely with suppliers to prioritize industries with the most urgent needs and looked for alternative sources of supply.
• Remained prudent in managing resources and expenses to brace against potential headwinds and achieve sustainable growth.
• Continued to work with customers and suppliers to ensure obligations and requirements are satisfied with optimal outcomes given the semiconductor shortage.

Supply Chain Management

Supplier Audits: Twice a year since 2013

Responsible Procurement

• Evaluating suppliers’ statutory qualifications, reputation, track record, and performance in fulfilling social responsibilities and commitment to environmental protection.
• Requiring suppliers to comply with laws and regulations and operate in good faith.
• Screening and selecting suppliers supplying energy-efficient electronic components.

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of extreme weather (cyclones, floods)
• Changes in precipitation patterns and extreme variability in weather patterns

Transition Risks

• More stringent sustainable policies (including sustainability reporting requirements)

Opportunities

• Exploring new market opportunities and fostering the low-carbon transformation of products.
• Expanding product portfolio towards the provision of clean energy and low-carbon solutions in the automotive and industrial segments.

Reporting Standards

Frameworks Used: GRI Standards: Core option

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient electronic components

Awards & Recognition

• Good MPF Employer 6 Years
• e-Contribution Award
• MPF Support Award

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Delays in the audit process due to movement restrictions and lockdowns in Shanghai impacting data collection from Willas-Array Electronics (Shanghai) Limited.
• Delays in data collection for the sustainability report due to the Shanghai lockdown, hindering the calculation of environmental information (emissions, energy, and water consumption).

Mitigation Strategies

• Applied for and received a 2-month extension from SGX-ST to hold the AGM and issue the sustainability report.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Anti-corruption
• Labour/management relations
• Product quality
• Customer satisfaction
• Customer privacy
• Information security
• Intellectual property rights
• Energy management
• Preventing child labour
• Preventing forced/compulsory labour

Environmental Achievements

• Upgraded lighting fixtures at headquarters office to LED tubes, resulting in more energy-efficient and environmentally friendly lighting.
• 19% reduction in non-hazardous waste generation intensity per employee.
• 3% drop in GHG emission intensity (in tCO2eq./employee).
• 2% reduction in energy consumption intensity per overall floor area.
• 5% reduction in energy consumption intensity per employee.
• 21% reduction in water consumption compared to the last reporting period.
• 43% less packaging materials consumed than in the last reporting period.

Social Achievements

• Accredited as the “Good MPF Employer 5 Years+” and presented with the e-Contribution Award and the MPF Support Award by the Mandatory Provident Fund Schemes Authority.
• Implemented flexible work arrangements, enforcing the use of face masks in the workplace, routine monitoring of body temperature, banning business travel, and using video conferencing to avoid large-scale meetings in response to the COVID-19 outbreak.
• Rolled out a new policy specifically for anti-corruption.
• 90 employees participated in anti-corruption training (112.6 training hours).

Governance Achievements

• Rolled out shareholders’ communication policy.
• Established a rigid governance structure to communicate ESG strategies, review ESG performance and targets, and evaluate ESG risks and opportunities across the Group.
• All members of the three key Board committees (audit, nomination, and remuneration) comprised independent directors.

Climate Goals & Targets

Environmental Challenges

• Decrease in sales and lower gross profit margin.
• Foreign exchange loss of approximately HK$32.4 million mainly arising from the depreciation of the Renminbi.
• Increase in finance costs mainly due to rising weighted average effective interest rate.
• Slowdown in the consumer electronics market, worsened in the second half of FY2023.
• Rising inflation and a high interest rate environment, exacerbated by China’s lockdown measures.
• Weak demand for semiconductor chips.
• Intense competition among suppliers.

Mitigation Strategies

• Strengthening sales in Greater China and expanding the product portfolio to grow and diversify its revenue base.
• Cautious investment in key growth segments such as Home Appliances, Industrial, and Automotive.
• Close collaboration with suppliers and customers to achieve mutually beneficial outcomes.
• Prudent management of operations and close monitoring of the liquidity position.
• Implementing energy-saving measures in warehouses and offices.
• Replacing incandescent and fluorescent tubes with LED lighting.
• Reducing paper consumption by deploying an e-leave system, e-payslips, e-Company Brochure, and encouraging electronic communication.

Supply Chain Management

Supplier Audits: Twice a year since 2013

Responsible Procurement

• Evaluating suppliers' statutory qualifications, reputation, track record, and performance in fulfilling social responsibilities and commitment to environmental protection.
• Requiring suppliers to comply with laws and regulations and operate in good faith.

Climate-Related Risks & Opportunities

Physical Risks

• Property damage, business interruption, and supply chain disruptions due to extreme weather events.
• Increased operating costs and reduced revenue due to long-term shifts in climate patterns.

Transition Risks

• Increased compliance costs due to tightened environmental laws and carbon pricing.
• Reputational damage due to negative perceptions of environmental and sustainability-related practices.

Opportunities

• Expanding product portfolio towards the provision of clean energy and low-carbon solutions in the automotive and industrial segments.

Reporting Standards

Frameworks Used: GRI Standards, TCFD framework

Awards & Recognition

• Good MPF Employer 5 Years+
• e-Contribution Award
• MPF Support Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Replaced all incandescent and fluorescent tubes with LED lighting at the Shanghai office, further reducing energy consumption and GHG emissions.
• Achieved a 33% reduction in packaging material consumption intensity in terms of kg/ft2.
• Generated 15% less paper waste compared to the previous reporting period.

Social Achievements

• Rolled out a specific anti-corruption policy
• Strengthened sales network in Greater China and actively sought opportunities for EMS projects.
• Provided orientation programmes to new employees, in-house training, peer learning, on-the-job coaching and internal briefing sessions.

Governance Achievements

• Established an ESG Team responsible for systematic planning and implementation of sustainability strategies.
• Established a robust governance structure to integrate sustainability into business practices.
• Appointed a lead independent director.

Climate Goals & Targets

Environmental Challenges

• Global semiconductor market downturn
• Macroeconomic uncertainties
• Geopolitical conflicts
• Sluggish consumer electronics market
• Weak market demand
• Inventory pressure
• Exchange rate fluctuations
• Intense price competition
• Trade tensions weakening the export market
• Reduced consumer demand for mobile phones
• Weak demand in consumer and commercial lighting markets
• Softer market conditions in consumer spending

Mitigation Strategies

• Offered discounts to actively reduce inventory
• Made provisions for slow-moving inventory
• Implemented cost control and monitoring measures
• Entered into foreign currency forward contracts to hedge against currency risk
• Closely monitoring changes in market conditions to ensure inventory levels are consistent with demand
• Investing resources to expand market reach in high-growth segments (Automotive and New Energy)
• Keeping a tight rein on expenses to cushion bottom-line against inflation
• Implementing a green travel policy to minimize unnecessary business air travel
• Prioritizes the procurement of equipment with energy-efficient features

Supply Chain Management

Supplier Audits: Twice a year for 29 major suppliers

Responsible Procurement

• Evaluation of statutory qualifications, reputation, previous track record, satisfaction of past cooperation partners, social responsibilities, commitment to environmental protection, compliance with laws and regulations, and adherence to business ethics.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, hurricanes, storm surges, floods)
• Long-term shifts in climate patterns

Transition Risks

• Policy and legal changes (environmental laws, carbon pricing)
• Reputational damage

Opportunities

• Development of energy-efficient products and clean energy solutions in automotive and industrial segments

Reporting Standards

Frameworks Used: GRI Standards, TCFD framework

Certifications: Null

Third-party Assurance: Internal audit

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient electronic components

Awards & Recognition

• Not disclosed