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Report of the Directors

Capital expenditure on fixed assets during the year was HK$34 million (2014: HK$119 million). As at 31st
March 2015, we had capital commitments contracted but not provided for in respect of moulds, plant and
machinery and renovation amounting to HK$16,018,000 (2014: HK$2,377,000).

Due to peg-rate system, we have limited exposure to trade-related foreign exchange risk as substantially all
of our sales, purchases and borrowings are denominated in United States dollars and Hong Kong dollars.
Adhering to the policy of not engaging in currency speculation, there was no gain or loss from speculative
activities during the reporting financial year.

To naturally hedge against the cost impact caused by the potential appreciation of Renminbi (“RMB”), the
Group has diversified its cash portfolio by investing in RMB denominated deposits and bonds. As at 31st
March 2015, the amount totalled RMB359 million.

EMPLOYEES

As at 31st March 2015, the Group had approximately 2,300 (2014: 2,900) employees in Hong Kong and
the PRC. Remuneration packages are generally structured by reference to market terms and individual
qualifications. Salaries and wages are normally reviewed on an annual basis based on performance appraisals
and other relevant factors. We also provide other benefits including medical insurance, provident fund and
education subsidies to all eligible staff.

MAJOR SUPPLIERS AND CUSTOMERS

The purchases and sales attributable to the Group’s major suppliers and customers expressed as a
percentage of total purchases and sales of the Group for the year ended 31st March 2015 are as follows:

Purchases
– the largest supplier 20%
– five largest suppliers combined 52%

Sales
– the largest customer 83%
– five largest customers combined 97%

None of the directors, their associates or shareholders (which to the knowledge of the directors owns more
than 5% of the Company’s share capital) had an interest in the major suppliers or customers noted above at
any time during the year.

16 ALCO HOLDINGS LIMITED ANNUAL REPORT 2015