Extracted from Annual Report 2016
On behalf of the Board of Directors (the "Board"), I am pleased to present to you the annual report of InnoTek Limited ("InnoTek" or the "Group") for the financial year ended 31 December 2016 ("FY'16").
FY'16 marked a healthy turnaround for the Group's financial performance after two years of losses. The Group recorded a significant increase in net profit after tax for FY'16 to S$11.6 million from a net loss of S$16.3 million a year earlier. This was despite a lower revenue posted for FY'16 as the Company managed to improve the cost efficiencies and asset utilisation of its operations.
Undoubtedly it reflects well on the leadership and experience of Mr Lou Yiliang ("Mr Lou"), who was re-designated as our Group's Chief Executive Officer ("CEO") on 1 March 2017. Mr Lou, who was first appointed as the Executive Director and CEO of Mansfield Manufacturing Company Limited ("Mansfield") on 2 November 2015, introduced measures in the second half of FY'15 to improve cost efficiencies and Group-wide productivity.
FY'16 represents the first full year of restructuring under Mr Lou. Under his leadership, InnoTek has demonstrated it is able to thrive amidst the competitive operating environment of manufacturing in China. Increasing margin compression, the result of rising labour and operational costs, has led to several Japanese office automation brands relocating to lower-cost countries.
On the contrary, the TV sector has remained vibrant. The introduction of bigger and higher-definition ("4K" and "8K") televisions requires highprecision and quality metal TV bezels for larger screens for our Taiwanese OEMs and Japanese clients whom we focus on. This sets us apart from local players producing for the domestic Chinese TV manufacturers. Indeed, we intend to strengthen our foothold in this sub-sector and subsequently penetrate the display market in China. The Group has commenced mass production of car display panels in FY'16.
Overall, several government incentives has lifted China's automotive business since late 2015. With a longer product lifecycle and overall growth trend, we believe this segment will remain an important and stable market for us.
We believe the restructuring initiatives initiated in the year under review constitute the start of a new chapter for InnoTek. More needs to be done to improve processes on the shopfloor and to secure more programmes from existing customers while winning over new customers.
Mr. Lou assumed the role of Executive Director and CEO of Mansfield Group since 2 November 2015 and has been re-designated as the Chief Executive Officer of InnoTek on 1 March 2017. He has been an invaluable asset to the Group and we believe his wealth of experience will continue to be a great contribution to InnoTek.Resignation
Mr. Peter Tan Boon Heng resigned as Non-Executive Director on 31 March 2016.Management Changes
Mr Song Lei was appointed as General Manager of Mansfield (Suzhou) Manufacturing Company Limited on 1 August 2016.
We extend a warm welcome to the new directors and managers, whose experience and guidance will bring fresh perspectives and vigour to the Group as we enter a new chapter of growth. To those who have left InnoTek, we thank them for their invaluable contributions and wish them well in their future endeavours.
On behalf of the Board, I would like to thank all our customers, business partners, management and staff for your dedication and hard work in the past year, which marks a highly successful transformation under Mr Lou's leadership. I would also like to take this opportunity to extend our gratitude to our loyal shareholders for your unwavering support.