Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 785,212,000, representing an increase of 10.7% compared to HKD 708,923,000 for the same period in 2023[5] - The company reported a loss before tax of HKD 27,757,000, an improvement from a loss of HKD 51,552,000 in the previous year, indicating a reduction in losses by 46.1%[5] - The net loss for the period was HKD 23,915,000, compared to a net loss of HKD 31,506,000 in the prior year, reflecting a decrease in net losses by 24.2%[5] - Total comprehensive loss for the period was HKD 63,300,000, down from HKD 101,331,000 in the previous year, marking a reduction of 37.6%[5] - Basic loss per share improved to HKD 3.79 from HKD 4.99, showing a 24.1% decrease in loss per share[5] - Total expenses for the six months ended June 30, 2024, amounted to HKD 196,977,000, an increase of 13.3% from HKD 173,838,000 in the same period of 2023[20] - The group reported a loss of HKD 685,156,000 for the six months ended June 30, 2024, compared to a loss of HKD 644,168,000 in the same period of 2023[23] Assets and Liabilities - Non-current assets decreased to HKD 865,794,000 as of June 30, 2024, from HKD 956,539,000 at the end of 2023, a decline of 9.5%[6] - Current assets totaled HKD 1,132,047,000, slightly down from HKD 1,136,446,000 at the end of 2023, indicating a decrease of 0.4%[6] - The company's total equity decreased to HKD 1,703,878,000 from HKD 1,798,762,000, reflecting a decline of 5.3%[7] - The group’s total liabilities increased, reflecting a need for further analysis on financial health and liquidity[20] Cash Flow - Operating cash flow before changes in working capital for the six months ended June 30, 2024, was HKD 54,332,000, compared to HKD 30,911,000 in 2023, indicating a significant improvement[10] - Net cash generated from operating activities for the six months ended June 30, 2024, was HKD 93,119,000, compared to a cash outflow of HKD 4,194,000 in the same period of 2023[10] - The company reported a net increase in cash and cash equivalents of HKD 52,150,000 for the six months ended June 30, 2024, compared to a decrease of HKD 105,635,000 in 2023[10] - The cash and cash equivalents increased to HKD 470,541,000 from HKD 428,758,000, representing a growth of 9.7%[6] Market and Revenue Growth - Revenue from China increased to HKD 694,610,000 in the first half of 2024, up from HKD 611,445,000 in the same period of 2023, reflecting a growth of about 13.6%[18] - The company plans to continue expanding its market presence, particularly in China, where it has seen significant revenue growth[18] - The company has no single customer contributing more than 10% of total revenue, indicating a diversified customer base[18] Dividends and Shareholder Information - The interim dividend declared is HKD 0.05 per share, totaling HKD 31,584,000, consistent with the previous year's interim dividend[23] - As of June 30, 2024, the total equity held by key directors amounts to 407,372,381 shares, representing 64.49% of the company[40] - The company has a total of 2,430,000 employee stock options available, with no options granted during the reporting period[46] - Pan Island Investments Limited holds 366,210,937 shares, representing 57.97% of the company's issued share capital[48] - HSBC International Trustee Limited holds 366,514,990 shares, representing 58.02% of the company's issued share capital[48] - David Michael Webb owns 37,938,498 shares, accounting for 6.00% of the company's issued share capital[48] Operational Insights - The company has maintained its accounting policies consistent with the previous year, ensuring stability in financial reporting[13] - Employee benefits expenses increased by 5.5% during the reporting period[34] - The group employed approximately 3,000 employees as of June 30, 2024, with a competitive remuneration policy in place[36] Future Outlook - The company anticipates a cautious evaluation of the market environment and demand due to uncertainties in the global business landscape and political situation[37] - The group expects to actively explore emerging trade markets, such as ASEAN member countries, to increase trade partnerships and reduce market risks[37] - The Chinese government is expected to implement measures to boost consumption and investment, which may accelerate the recovery of the domestic market[37] - The company plans to focus on research and development to enhance overall processing capabilities and product quality, while also monitoring and reducing operational costs[37] - The company will continue to adjust marketing strategies to explore other emerging overseas markets for stable development and income[37] - The group is confident in its ability to navigate the changing business environment and achieve stable and healthy business development[37] Other Financial Information - Other income for the six months ended June 30, 2024, totaled HKD 6,980,000, slightly down from HKD 7,453,000 in the same period of 2023[19] - The company experienced a net foreign exchange loss of HKD 1,705,000 for the six months ended June 30, 2024, compared to a loss of HKD 3,872,000 in 2023, indicating an improvement in currency management[19] - The fair value of investment properties decreased by HKD 5,100,000 during the period, compared to a decrease of HKD 1,500,000 in the same period of 2023[25] - The group incurred a deferred tax credit of HKD 4,840,000 for the six months ended June 30, 2024, down from HKD 18,310,000 in the same period of 2023[21] - The group’s cash proceeds from the sale of certain properties, plant, and equipment amounted to HKD 1,166,000, compared to HKD 1,958,000 in the same period of 2023[25] - The group reported a decrease in the fair value of investment properties by HKD 3,600,000 compared to the same period last year[34] - No purchases, sales, or redemptions of the company's shares or other securities occurred during the six months ending June 30, 2024[50] - The company has complied with all provisions of the Corporate Governance Code during the review period[50]

Revenue Performance - Revenue for the six months ended June 30, 2024, was HKD 785,212, compared to HKD 708,923 for the same period in 2023, representing an increase of approximately 10.8%[1] - The group's total revenue for the six months ended June 30, 2024, was HKD 785,212,000, compared to HKD 708,923,000 for the same period in 2023[12] - The cost of goods sold for the six months ended June 30, 2024, was HKD 685,156,000, compared to HKD 644,168,000 for the same period in 2023[15] - Other income, including interest income, was HKD 6,980,000 for the six months ended June 30, 2024, down from HKD 7,453,000 in 2023[13] Loss and Expenses - The pre-tax loss for the six months ended June 30, 2024, was HKD 27,757, an improvement from a loss of HKD 51,552 in the same period of 2023[2] - The net loss for the period was HKD 23,915, compared to a net loss of HKD 31,506 in the previous year, indicating a reduction in losses of approximately 24.5%[2] - Total comprehensive expenses for the period amounted to HKD 63,300, down from HKD 101,331 in the previous year, reflecting a decrease of approximately 37.6%[2] - The loss attributable to the company's owners for the same period was HKD 23,915,000, a decrease of 24.1% from HKD 31,506,000 in 2023[23] Assets and Liabilities - The group's total assets decreased to HKD 1,799,438 as of June 30, 2024, from HKD 1,899,680 as of December 31, 2023, a decline of about 5.3%[3] - Non-current assets, including investment properties, decreased to HKD 865,794 from HKD 956,539, a reduction of approximately 9.5%[3] - Inventory as of June 30, 2024, was HKD 480,295, down from HKD 530,511 at the end of 2023, representing a decrease of about 9.5%[3] - Trade payables as of June 30, 2024, were HKD 35,755,000, slightly down from HKD 35,820,000 as of December 31, 2023[21] Shareholder Information - The basic loss per share for the period was HKD 3.79, compared to HKD 4.99 in the same period last year, indicating an improvement in per-share loss[2] - The group declared an interim dividend of HKD 0.05 per share, totaling HKD 31,584,000, consistent with the previous year[16] - The board declared an interim dividend of HKD 0.05 per share for the six months ended June 30, 2024, unchanged from the previous year[28] Cash Flow - The company's cash and cash equivalents increased to HKD 470,541 from HKD 428,758, an increase of approximately 9.7%[3] - Cash and bank balances increased to HKD 470,541,000 as of June 30, 2024, compared to HKD 428,758,000 as of December 31, 2023[24] Market and Strategic Focus - The group plans to explore emerging trade markets such as ASEAN countries to mitigate market risks and enhance trade partnerships[26] - The company will focus on research and development to improve overall processing capabilities and product quality, while also implementing automated production lines to enhance efficiency[26] - The geopolitical tensions and trade protectionism are expected to pose challenges to global economic recovery, impacting the group's export business[26] Accounting and Reporting - The company has maintained its accounting policies consistent with those applied in the previous financial year, ensuring stability in financial reporting[6] - Revenue from the manufacturing and sales of molds and related products is recognized upon delivery to customers, with a credit period ranging from 30 to 90 days[10] - The group’s tax rate for eligible entities in Hong Kong is 8.25% on the first HKD 2 million of profits, and 16.5% on profits exceeding that threshold[15] Trade Receivables - As of June 30, 2024, trade receivables amounted to HKD 104,364,000, an increase from HKD 85,387,000 as of December 31, 2023[18]

Financial Performance - The company reported a significant increase in revenue for the fiscal year ending December 31, 2023, with total revenue reaching $1.2 billion, representing a 15% year-over-year growth[3]. - The company provided guidance for the next fiscal year, projecting revenue growth of 10% to 12%, with expected total revenue between $1.32 billion and $1.344 billion[3]. - The company reported a net profit margin of 12%, reflecting improved operational efficiency and cost management strategies[3]. - The company reported a comprehensive financial statement for the year ending December 31, 2023, reflecting its accounting policies and significant financial data[42]. User Growth and Market Expansion - User data showed a 20% increase in active users, bringing the total to 5 million users by the end of the fiscal year[3]. - The company is expanding its market presence in Asia, targeting a 30% increase in market share within the next two years[3]. Product Development and Sales - New product launches contributed to a 25% increase in sales in the last quarter, with the introduction of two major products[3]. - Research and development expenses increased by 18%, totaling $150 million, focusing on innovative technologies and product enhancements[3]. - The company completed a strategic acquisition of a tech startup for $200 million, aimed at enhancing its product offerings and technological capabilities[3]. Sustainability and Corporate Responsibility - The board emphasized the importance of sustainability initiatives, with a commitment to reduce carbon emissions by 40% by 2025[3]. - The company plans to implement a new customer loyalty program, expected to increase customer retention rates by 15% over the next year[3]. Governance and Board Composition - The company’s board nomination policy outlines the criteria and procedures for selecting and recommending director candidates[62]. - The board consists of 10 members, with 1 female member, representing 10% of the board and 25% of independent non-executive directors[80]. - The board aims to maintain the current level of female representation and will gradually increase the proportion of female directors through the selection and recommendation of qualified candidates[80]. - As of December 31, 2023, the board consists of 60% independent non-executive directors and 40% executive directors[114]. - The company emphasizes the importance of board diversity for enhancing overall performance quality[110]. - The company has implemented measures to promote diversity among all employees, with male employees making up 86% and female employees 14% of the workforce[121]. Audit and Internal Controls - The Audit Committee consists of four independent non-executive directors, with Mr. Wang Keqin serving as the chairman[133]. - The audit committee held four meetings during the fiscal year ending December 31, 2023, to review quarterly performance and internal audit results[173]. - The company’s financial reporting procedures and internal controls are audited and supervised by the Audit Committee[136]. - The company’s governance report includes a review of risk management and internal control systems, ensuring effectiveness against potential risks[183]. Remuneration and Compensation - The remuneration committee reviewed the compensation policies and structures for directors and senior management, considering the company's performance and market data[126]. - The remuneration committee held four meetings during the fiscal year ending December 31, 2023, with full attendance from all members[122]. - The company confirmed that there are no other disclosures regarding the remuneration of senior management, as the remuneration of directors has been disclosed individually[132]. Financial Assets and Liabilities - The company’s deferred tax liabilities and assets are measured based on expected tax results from the recovery or settlement of its assets and liabilities at the end of the reporting period[146]. - The company recognizes deferred tax assets only when it is probable that sufficient taxable profits will be available to utilize the temporary differences[145]. - The company’s retirement benefit costs are recognized as expenses when employees provide services that entitle them to contributions[158]. - The company confirms that liabilities for employee benefits are measured at the present value of expected future cash outflows[160]. Miscellaneous - The company has not entered into any management contracts for significant portions of its business during the year[54]. - There were no purchases, sales, or redemptions of the company's listed securities during the year[57]. - The company has maintained appropriate directors' liability insurance for its directors throughout the year[53]. - The company has not established any stock-linked agreements during the year[55]. - The company has not disclosed any significant interests held by directors in major transactions or contracts during the fiscal year[170]. - The company has not been informed of any other individuals holding significant interests in its shares, aside from its directors and key executives[165]. - The company has not established any arrangements that would allow directors to benefit from purchasing shares or bonds of the company or any other entity during the year[169]. - The audit committee recommended the reappointment of Deloitte as the external auditor for the fiscal year 2024[194]. - Mr. Li Yuhai has been an independent non-executive director since September 2004[200]. - He is the chairman of the nomination committee and a member of various accounting and director associations[200]. - Mr. Li has extensive experience in accounting and auditing fields[200]. - He is currently an independent director of Hyflux Ltd. and IPC Corporation Limited, both listed on the Singapore Exchange[200]. - Mr. Li served as a director of PGG Wrightson Limited until October 24, 2023, when he resigned[200]. - He has not held any directorships in public companies listed on Hong Kong or overseas securities markets in the past three years[200].

Financial Performance - The group's revenue for the year ended December 31, 2023, was HKD 1,449,340, a decrease of 9.5% compared to HKD 1,601,433 in 2022[9] - The group reported a loss before tax of HKD 112,614, compared to a profit of HKD 21,670 in the previous year[9] - The net loss for the year was HKD 72,431, compared to a profit of HKD 15,814 in 2022[9] - Total revenue for the year ended December 31, 2023, was 20,846,000 HKD, a decrease from 23,204,000 HKD in 2022, reflecting a decline of approximately 10.2%[22] - Interest income decreased to 8,370,000 HKD in 2023 from 12,300,000 HKD in 2022, representing a decline of about 32.4%[22] - The company reported a net loss for the year due to reduced sales orders and increased operational costs, leading to a significant drop in profitability[35] - The company reported a loss attributable to owners of HKD 72,431,000 for 2023, compared to a profit of HKD 15,814,000 in 2022[60] - Basic loss per share for 2023 was HKD 0.1147, down from earnings of HKD 0.0250 per share in 2022[60] - The company recorded a loss of HKD 72,431,000 for the year ended December 31, 2023, compared to a profit of HKD 15,814,000 in 2022[84] Assets and Liabilities - Non-current assets decreased from HKD 1,007,409 in 2022 to HKD 956,539 in 2023[11] - Current assets decreased from HKD 1,294,068 in 2022 to HKD 1,136,446 in 2023[11] - The group’s inventory decreased from HKD 606,924 in 2022 to HKD 530,511 in 2023[11] - Trade and other receivables increased from HKD 150,501 in 2022 to HKD 177,177 in 2023[11] - The net asset value decreased to 1,798,762,000 HKD in 2023 from 1,986,581,000 HKD in 2022, a decline of about 9.4%[38] - The total liabilities decreased from 229,109,000 HKD in 2022 to 214,624,000 HKD in 2023, a reduction of approximately 6.3%[32] Dividends - The board declared a final dividend of 0.05 HKD per share for 2023, down from 0.06 HKD per share in 2022, totaling 31,584,000 HKD compared to 37,901,000 HKD in the previous year[28] - The company declared an interim dividend of HKD 0.05 per share for 2023, down from HKD 0.06 per share in 2022[54] - The proposed final dividend for the year ended December 31, 2023, is HKD 0.05 per share, down from HKD 0.06 per share in 2022[90] Government Support - The company recognized government subsidies related to COVID-19 support amounting to 3,188,000 HKD in 2022, with no such subsidies reported for 2023[22] - The company recognized government grants of HKD 4,429,000 in 2023, compared to HKD 352,000 in 2022[49] Market Outlook - The company anticipates continued challenges in the market due to weak consumer confidence and geopolitical tensions affecting global economic recovery[35] - The company anticipates a slow recovery in the domestic market due to external economic pressures and changing post-pandemic consumer behaviors[61] - The company anticipates a significant decline in export orders to Europe and the US due to ongoing trade tensions and economic slowdowns[87] Operational Strategy - The company plans to optimize its production structure and continue developing high-quality, high-tech production capabilities[68] - The company aims to control raw material and operating cost fluctuations to reduce operational risks and increase product profitability[88] - The company plans to strengthen its sales team and management to further expand into the domestic market and other overseas markets[87] Employee Information - The company employed approximately 2,900 employees as of December 31, 2023, with a competitive compensation system in place[86] Financial Reporting Standards - The group has not early adopted any new or revised Hong Kong Financial Reporting Standards that have been issued but are not yet effective[7]

Financial Performance - For the six months ended June 30, 2023, the group's revenue from manufacturing and sales of modular frames and related products was HKD 611,445,000, a decrease of 22.4% compared to HKD 787,688,000 in the same period of 2022[25]. - The group reported a loss of HKD 31,506,000 for the period, reflecting a significant downturn compared to previous earnings[15]. - Revenue for the six months ended June 30, 2023, was HKD 708,923,000, a decrease of 21.9% compared to HKD 907,552,000 for the same period in 2022[69]. - The total comprehensive loss for the period was HKD 101,331,000, compared to a loss of HKD 40,453,000 in the previous year[69]. - Basic loss per share for the period was HKD (4.99), compared to earnings of HKD 6.49 per share in the same period last year[69]. - The company recorded a loss of HKD 31,506,000 for the six months ended June 30, 2023, compared to a profit of HKD 40,988,000 in the same period last year, representing a significant decline in performance[94]. - Revenue decreased by 21.9% year-on-year due to a substantial reduction in total orders within the market, reflecting the challenging operating environment[117]. Assets and Liabilities - The net asset value as of June 30, 2023, was HKD 976,017,000, down from HKD 1,096,362,000 as of December 31, 2022, representing a decline of 11%[14]. - The total equity as of June 30, 2023, was HKD 1,847,349,000, compared to HKD 1,986,581,000 at the end of 2022, indicating a decrease of 7%[14]. - The group’s total liabilities decreased from HKD 117,190,000 to HKD 103,937,000, a reduction of 11.2%[14]. - As of June 30, 2023, total non-current assets amounted to HKD 975,269,000, a decrease of 3.2% from HKD 1,007,409,000 as of December 31, 2022[35]. - Current assets totaled HKD 1,160,799,000, down 10.3% from HKD 1,294,068,000 in the previous year[35]. - The company's cash and bank balances decreased to HKD 417,040,000, a decline of 22.3% compared to HKD 536,643,000 as of December 31, 2022[35]. Cash Flow and Management - The group’s cash flow statement for the six months ended June 30, 2023, indicates a need for improved cash management strategies[16]. - Operating cash flow before changes in working capital was HKD 30,911,000, a decrease from HKD 111,716,000 in the prior year[70]. - Cash and cash equivalents at the end of the period were HKD 417,040,000, down from HKD 603,565,000 at the end of the previous year[70]. Market Strategy and Future Outlook - The company plans to focus on market expansion and new product development to recover from the current downturn[34]. - Future guidance indicates a cautious outlook, with expectations of gradual recovery in revenue as market conditions improve[34]. - The company plans to cautiously assess market conditions and demand in response to ongoing global economic uncertainties and high inflation risks[97]. - The group anticipates that the performance in the second half of the year will not be worse than the first half, driven by a recovery in consumer confidence and economic activity in China[144]. - The group plans to actively expand into the Chinese market and other overseas markets to stabilize development and income[144]. Shareholder Information - Major shareholders include Pan Island Investments Limited holding 366,210,937 shares, representing 57.97% of the issued share capital[183]. - HSBC International Trustee Limited, as a trustee, controls 366,514,990 shares, accounting for 58.02% of the issued share capital[183]. - The beneficial owners, Shao Tielong and Shao Yulong, each hold 41,161,444 shares, contributing to a total equity of 407,372,381 shares, which is 64.49%[174]. - The total equity held by Shao Xutong and Shao Yuheng includes significant family interests, indicating a strong family influence in the company's ownership structure[174]. Corporate Governance - The company has complied with all provisions of the Corporate Governance Code as per the Listing Rules during the review period[184]. - The company has not reported any changes in shareholdings by directors or key executives outside of the disclosed information[178].

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) The company announced its unaudited consolidated financial results for H1 2023, detailing a significant revenue decline and a shift from profit to loss [Company Information](index=1&type=section&id=Company%20Information) Lung Kee (Bermuda) Holdings Limited announced its unaudited consolidated financial results for the six months ended June 30, 2023 - Company name: Lung Kee (Bermuda) Holdings Limited, stock code: **255**[14](index=14&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement[1](index=1&type=chunk) [Financial Performance Summary](index=10&type=section&id=Financial%20Performance%20Summary) For the six months ended June 30, 2023, the Group's revenue decreased by **21.9%** year-on-year, turning from profit to a loss of **HK$31,506,000**, with basic loss per share of **4.99 HK cents** Summary of Key Financial Data for the Six Months Ended June 30, 2023 | Indicator | June 30, 2023 (HK$ Thousand) | June 30, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 708,923 | 907,552 | | (Loss) Profit Attributable to Owners of the Company | (31,506) | 40,988 | | Basic (Loss) Earnings Per Share | (4.99) HK Cents | 6.49 HK Cents | [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated statements of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the Group's revenue was **HK$708,923 thousand**, a decrease from the prior period, resulting in a loss for the period of **HK$31,506 thousand** and total comprehensive expense of **HK$101,331 thousand** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 708,923 | 907,552 | | Other income, gains and losses | 5,411 | 2,525 | | (Decrease) Increase in fair value of investment properties | (1,500) | 2,000 | | Net impairment loss recognised (reversed) under expected credit loss model | (244) | 2,181 | | Changes in inventories of finished goods and work in progress | 5,000 | 7,468 | | Raw materials and consumables used | (306,019) | (359,766) | | Employee benefit expenses | (204,317) | (238,020) | | Depreciation of right-of-use assets | (3,018) | (2,985) | | Depreciation of property, plant and equipment | (81,720) | (75,359) | | Other expenses | (173,838) | (191,527) | | Interest expense on lease liabilities | (230) | (168) | | (Loss) Profit before tax | (51,552) | 53,901 | | Income tax credit (expense) | 20,046 | (12,913) | | (Loss) Profit for the period | (31,506) | 40,988 | | Exchange differences arising on translation of overseas operations | (69,825) | (81,441) | | Total comprehensive expense for the period | (101,331) | (40,453) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets less current liabilities were **HK$1,951,286 thousand**, and net assets were **HK$1,847,349 thousand**, a decrease from December 31, 2022 Condensed Consolidated Statement of Financial Position (As at June 30, 2023) | Indicator | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Investment properties | 173,500 | 175,000 | | Property, plant and equipment | 664,151 | 667,715 | | Right-of-use assets | 67,965 | 73,603 | | Deposits paid for acquisition of property, plant and equipment | 43,586 | 78,583 | | Deferred tax assets | 26,067 | 12,508 | | **Current assets** | | | | Inventories | 594,579 | 606,924 | | Trade, bills and other receivables | 149,180 | 150,501 | | Bank balances and cash | 417,040 | 536,643 | | **Current liabilities** | | | | Trade, bills and other payables | 120,324 | 135,808 | | Contract liabilities | 25,977 | 21,765 | | Lease liabilities | 3,615 | 3,574 | | Tax payable | 34,526 | 36,264 | | Dividends payable | 340 | 295 | | **Non-current liabilities** | | | | Deferred tax liabilities | 13,721 | 17,903 | | Lease liabilities | 4,038 | 5,986 | | Other payables | 86,178 | 93,301 | | **Total equity** | 1,847,349 | 1,986,581 | [Notes to the Condensed Consolidated Financial Statements](index=4&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides notes on the basis of presentation, accounting policies, and specific items in the financial statements [Basis of Presentation and Principal Accounting Policies](index=4&type=section&id=Basis%20of%20Presentation%20and%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix 16 of the Listing Rules, using the historical cost basis except for investment properties, with accounting policies consistent with the prior year, save for amendments to HKFRS - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA and the applicable disclosure requirements of Appendix 16 to the Listing Rules of The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The condensed consolidated financial statements are prepared on the historical cost basis, except for investment properties which are stated at fair value[10](index=10&type=chunk) - The accounting policies and methods of computation used are the same as those followed in the preparation of the annual financial statements for the year ended December 31, 2022, except for changes in accounting policies due to amendments to HKFRS[16](index=16&type=chunk) [Application of Amendments to Hong Kong Financial Reporting Standards](index=4&type=section&id=Application%20of%20Amendments%20to%20Hong%20Kong%20Financial%20Reporting%20Standards) This interim period saw the first-time application of certain new and amended HKFRSs issued by the HKICPA, including HKFRS 17 and amendments to HKAS 8 and 12, which had no significant impact on the Group's financial statements, except for clarifying the definition of accounting estimates - During the current interim period, the Group has applied HKFRS 17, and the amendments to HKAS 8 (Definition of Accounting Estimates) and HKAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction) for the first time[17](index=17&type=chunk)[18](index=18&type=chunk) - The application of these amendments has had no material impact on the Group's condensed consolidated financial statements, except for the amendment to HKAS 8 which clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors[13](index=13&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) [Revenue and Segment Information](index=5&type=section&id=Revenue%20and%20Segment%20Information) The Group primarily manufactures and sells mould bases and related products, recognizing revenue when control of goods transfers to customers, operating as a single segment with consolidated results including all income, expenses, and tax - The Group is principally engaged in the manufacture and sale of mould bases and related products, with revenue representing the invoiced value of goods sold to external customers during the period, net of returns and trade discounts provision[13](index=13&type=chunk) - Revenue is recognised when control over the goods has been transferred to the customers, which is at the point in time when the goods are delivered to the customers[35](index=35&type=chunk) - The Group has only one operating segment, which is determined based on information reported to the chief operating decision maker for the purposes of resource allocation and performance assessment[21](index=21&type=chunk) Revenue by Geographical Location (For the six months ended June 30) | Geographical Location | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Asia | 611,445 | 787,688 | | Others | 97,478 | 119,864 | | **Total Revenue** | **708,923** | **907,552** | [Other Income, Gains and Losses](index=6&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) For the six months ended June 30, 2023, the Group's other income totaled **HK$7,453 thousand**, primarily from interest and rental income, but net exchange losses resulted in negative other gains and losses Other Income, Gains and Losses (For the six months ended June 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | **Other income** | | | | Interest income | 4,174 | 7,479 | | Rental income | 2,824 | 2,708 | | Government grants | 0 | 236 | | Miscellaneous income | 455 | 2,090 | | **Other gains and losses** | | | | Gain on disposal of property, plant and equipment | 1,830 | 4,606 | | Net exchange losses | (3,872) | (14,594) | | **Total** | **5,411** | **2,525** | [Income Tax](index=7&type=section&id=Income%20Tax) Hong Kong profits tax operates under a two-tiered system, with the first **HK$2 million** of assessable profits taxed at **8.25%** and the remainder at **16.5%**, while Chinese subsidiaries face a **25%** tax rate, with a **5%** dividend withholding tax under tax treaties - Hong Kong profits tax is calculated under a two-tiered profits tax regime, where the first **HK$2 million** of assessable profits is taxed at **8.25%** and the remaining assessable profits are taxed at **16.5%**[25](index=25&type=chunk)[40](index=40&type=chunk) - The tax rate for the Group's subsidiaries in Mainland China is **25%**, but the applicable withholding tax rate for the Group under the tax treaty between Hong Kong and Mainland China is **5%**[26](index=26&type=chunk)[41](index=41&type=chunk) Components of Income Tax (Expense) Credit (For the six months ended June 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong tax | (631) | (1,088) | | Tax outside Hong Kong | 2,367 | (11,115) | | Deferred tax | 18,310 | (710) | | **Total income tax credit (expense)** | **20,046** | **(12,913)** | [Loss (Profit) for the Period](index=7&type=section&id=Loss%20%28Profit%29%20for%20the%20Period) The loss for the period was **HK$31,506 thousand**, primarily influenced by factors such as inventory costs, inventory provisions, and depreciation Items Deducted from (Credited to) Loss (Profit) for the Period (For the six months ended June 30) | Item | 2023 (HK$ Thousand) | 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Cost of inventories recognised as an expense | 644,168 | 723,741 | | Provision for (utilisation of) inventories recognised | 2,243 | (4,428) | [Dividends](index=8&type=section&id=Dividends) The Board resolved to declare an interim dividend of **5 HK cents** per share, totaling **HK$31,584 thousand**, in addition to the final dividend of **6 HK cents** per share for 2022 already declared and paid - The Board resolved to declare an interim dividend of **5 HK cents** per share (2022: 6 HK cents) for the six months ended June 30, 2023, totaling **HK$31,584,000**[29](index=29&type=chunk) - During the period, a final dividend of **6 HK cents** per share (for the six months ended June 30, 2022: 20 HK cents) for the year ended December 31, 2022, totaling **HK$37,901,000**, was declared and paid to shareholders[62](index=62&type=chunk) [Loss (Earnings) Per Share](index=8&type=section&id=Loss%20%28Earnings%29%20Per%20Share) For the six months ended June 30, 2023, basic loss per share was **4.99 HK cents**, compared to basic earnings per share of **6.49 HK cents** in the prior period, with no diluted earnings per share presented due to the absence of potential ordinary shares Basic (Loss) Earnings Per Share (For the six months ended June 30) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Basic (Loss) Earnings Per Share | (4.99) HK Cents | 6.49 HK Cents | | (Loss) Profit Attributable to Owners of the Company | (31,506,000) HK$ | 40,988,000 HK$ | | Number of ordinary shares in issue | 631,677,303 Shares | 631,677,303 Shares | - No diluted (loss) earnings per share for both periods are presented as there were no potential ordinary shares outstanding during the period or at the end of the reporting period[63](index=63&type=chunk) [Trade, Bills and Other Receivables](index=9&type=section&id=Trade%2C%20Bills%20and%20Other%20Receivables) As of June 30, 2023, trade receivables amounted to **HK$80,110 thousand** and bills receivable to **HK$12,217 thousand**, with credit terms for trade customers ranging from **30 to 90 days** - Trade, bills and other receivables include trade receivables of **HK$80,110,000** (net of allowance for credit losses) and bills receivable of **HK$12,217,000**[45](index=45&type=chunk) - The Group grants credit terms to trade customers ranging from **30 to 90 days**[64](index=64&type=chunk) Ageing Analysis of Trade and Bills Receivables (As at the end of the reporting period) | Ageing | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 78,348 | 86,508 | | 61 to 90 days | 16,253 | 12,187 | | Over 90 days | 6,531 | 6,248 | | **Total** | **101,132** | **104,943** | [Trade, Bills and Other Payables](index=9&type=section&id=Trade%2C%20Bills%20and%20Other%20Payables) As of June 30, 2023, trade payables were **HK$34,448 thousand** with no bills payable, and credit terms for purchases ranged from **30 to 150 days** - Trade, bills and other payables include trade payables of **HK$34,448,000** and no bills payable[46](index=46&type=chunk) - In general, the credit terms for purchases of goods range from **30 to 150 days**[47](index=47&type=chunk) Ageing Analysis of Trade and Bills Payables (As at the end of the reporting period) | Ageing | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 27,952 | 23,494 | | 61 to 90 days | 4,547 | 4,334 | | Over 90 days | 1,949 | 3,554 | | **Total** | **34,448** | **31,382** | [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) This section discusses the Group's business and financial performance, liquidity, human resources, and future outlook [Business Review](index=10&type=section&id=Business%20Review) During the review period, the global economy and business environment faced significant challenges, including COVID-19 impacts, US-China trade disputes, interest rate hikes, and geopolitical tensions, leading to a substantial decrease in total orders, declining sales revenue, and a shift from profit to loss - Factors such as global economic slowdown, US-China trade disputes, interest rate hikes in major economies, and geopolitical tensions negatively impacted the Group's operating environment[48](index=48&type=chunk)[49](index=49&type=chunk) - A significant reduction in total orders led to underutilized processing volume and capacity, a substantial decline in sales revenue, and, coupled with relatively fixed operating costs, resulted in the Group's first-half performance turning from profit to loss[48](index=48&type=chunk)[49](index=49&type=chunk) - The recovery of the domestic sales market in China has been slow, with consumer sentiment and confidence still needing restoration, leading to weak demand for consumer goods[69](index=69&type=chunk) - Raw material prices for mould steel remained relatively stable, with narrowing short-term fluctuations[70](index=70&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) For the six months ended June 30, 2023, the Group's revenue decreased by **21.9%** year-on-year, raw materials and consumables cost as a percentage of revenue increased, employee benefits and other expenses decreased, but depreciation of property, plant and equipment increased, resulting in a loss of **HK$31,506 thousand** - Revenue decreased by **21.9%** compared to the same period last year, primarily due to a significant reduction in total market orders caused by a challenging operating environment[51](index=51&type=chunk) - Cost of raw materials and consumables used decreased by 14.6%, but its percentage of revenue increased to **42.5%** (2022: **38.8%**)[51](index=51&type=chunk) - Employee benefit expenses and other expenses decreased by **14.2%** and **9.2%** respectively, while depreciation of property, plant and equipment increased by **8.4%**[51](index=51&type=chunk) - The change in fair value of investment properties decreased by **HK$3,500,000** compared to the same period last year, while other income increased by **HK$2,886,000**[72](index=72&type=chunk) - For the six months ended June 30, 2023, the net impairment loss recognised under the expected credit loss model was **HK$244,000** (2022: net impairment loss reversed of **HK$2,181,000**)[72](index=72&type=chunk) - Income tax credit of **HK$20,046,000** (2022: income tax expense of **HK$12,913,000**), including a tax refund of **HK$3,646,000** for over-provision in prior years[72](index=72&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group's total equity was **HK$1,847,349 thousand**, with bank balances and cash of **HK$417,040 thousand** and no borrowings, indicating ample cash to meet operational and capital commitments Liquidity Position (As at period end) | Indicator | June 30, 2023 (HK$ Thousand) | December 31, 2022 (HK$ Thousand) | | :--- | :--- | :--- | | Total equity | 1,847,349 | 1,986,581 | | Bank balances and cash | 417,040 | 536,643 | | Borrowings | Nil | Nil | - Bank balances and cash are placed as short-term deposits with major banks in Hong Kong and China[73](index=73&type=chunk) - The COVID-19 pandemic did not affect the Group's financial position[53](index=53&type=chunk) [Employees and Remuneration Policy](index=11&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group employed approximately **2,900** staff, implementing a competitive remuneration system where promotions and salary increments are performance-based, with share options also granted - As of June 30, 2023, the Group employed approximately **2,900** staff[54](index=54&type=chunk) - The Group maintains a competitive remuneration system for its employees, with promotions and salary increments based on performance evaluations, and share options granted according to individual performance[54](index=54&type=chunk) [Outlook](index=12&type=section&id=Outlook) The Group anticipates that second-half performance will not be worse than the first half, with consumer spending and market orders expected to recover due to China's economic normalization and government stimulus measures, while actively expanding markets, optimizing operations with automation, and managing costs - The Group expects that the second-half performance will not be worse than the first half, as China's economic activities normalize, consumer confidence and spending power will gradually improve, and the Chinese economy will recover positively[55](index=55&type=chunk) - The Chinese government is expected to introduce macro-economic stimulus measures, which are anticipated to boost consumption and strengthen the development of the domestic sales market[55](index=55&type=chunk) - The Group expects demand for consumer goods such as environmentally friendly new energy vehicles, high-end electronic technology products, and smart home appliances to gradually recover, leading to an increase in market order volume[55](index=55&type=chunk) - The Group will actively expand into the Chinese market and other overseas markets to achieve stable development and revenue[55](index=55&type=chunk) - The Group will continue to optimize and strengthen its internal operating structure, adopting automated production lines to enhance overall processing capabilities, production speed, and product quality, while striving to control cost fluctuations[77](index=77&type=chunk) - Despite the uncertain business outlook, the Group will strive for stable and healthy business growth and maintain its competitive advantages amidst adversity[56](index=56&type=chunk)[76](index=76&type=chunk) [Other Information](index=13&type=section&id=Other%20Information) This section covers the review of interim financial statements, dividend, share transfer, securities, corporate governance, and board composition [Review of Interim Financial Statements](index=13&type=section&id=Review%20of%20Interim%20Financial%20Statements) The Audit Committee, in conjunction with management and external auditor Deloitte Touche Tohmatsu, reviewed the Group's accounting principles and practices, discussing internal controls and financial reporting matters - The Audit Committee, together with management and the external auditor, Deloitte Touche Tohmatsu, has reviewed the accounting principles and practices adopted by the Group and discussed internal control and financial reporting matters[79](index=79&type=chunk) [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board has resolved to declare an interim dividend of **5 HK cents** per share for the six months ended June 30, 2023, payable on or about September 25, 2023 - The Board has resolved to declare an interim dividend of **5 HK cents** per share (2022: 6 HK cents) for the six months ended June 30, 2023[80](index=80&type=chunk) - The interim dividend will be paid on or about September 25, 2023, to shareholders whose names appear on the register of members of the Company on September 13, 2023[80](index=80&type=chunk) - Shareholders whose shares of the Company are deposited in securities accounts with The Central Depository (Pte) Limited in Singapore will be entitled to the interim dividend[82](index=82&type=chunk) [Closure of Register of Members](index=13&type=section&id=Closure%20of%20Register%20of%20Members) To qualify for the interim dividend, the Company will suspend its share transfer registration from September 12, 2023, to September 13, 2023 - The Company's register of members will be closed from September 12, 2023, to September 13, 2023 (both days inclusive)[81](index=81&type=chunk) - All duly completed transfer forms, together with the relevant share certificates, must be lodged with the Company's Hong Kong Share Registrar by 4:30 p.m. on September 11, 2023[57](index=57&type=chunk) [Purchase, Sale or Redemption of Securities](index=13&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities during the six months ended June 30, 2023 - Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's shares or other securities during the six months ended June 30, 2023[83](index=83&type=chunk) [Corporate Governance](index=13&type=section&id=Corporate%20Governance) Throughout the review period, the Company complied with all code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules of The Stock Exchange of Hong Kong Limited - Throughout the review period, the Company complied with all code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules of The Stock Exchange of Hong Kong Limited[84](index=84&type=chunk) [Board of Directors](index=13&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises six executive directors, including Mr. Shao Tie Lung (Chairman), and four independent non-executive directors, including Dr. Li Tat Yee - The executive directors of the Company are Mr. Shao Tie Lung (Chairman), Mr. Shao Yuk Lung, Mr. Wai Lung Shing, Mr. Ding Zong Hao, Mr. Shao Xu Tong and Mr. Shao Yu Heng[85](index=85&type=chunk) - The independent non-executive directors of the Company are Dr. Li Tat Yee, Mr. Li Yu Hoi, Mr. Wong Hak Kan and Ms. Ho Lap Mei[85](index=85&type=chunk)

Procurement and Suppliers - The largest supplier accounted for 41% of the total procurement amount for the year, while the top five suppliers together accounted for 65%[3]. Corporate Governance - The company has a total equity of 407,372,381 shares, representing 64.49% of the issued share capital[9]. - The company has not entered into any arrangements that would allow directors to benefit from purchasing shares or bonds of the company or any other entity during the year[15]. - The board consists of six executive directors and four independent non-executive directors as of December 31, 2022[20]. - The company has adopted the standard code of conduct for securities trading by directors, ensuring compliance throughout the year[19]. - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange's listing rules[96]. - The board of directors held four regular meetings during the fiscal year, with all directors attending[77]. - The company does not grant performance-related equity compensation to independent non-executive directors[6]. Financial Performance - The group's revenue for the year ended December 31, 2022, was HKD 1,601,433,000, with a profit of HKD 15,814,000[44]. - The group's revenue for the year ended December 31, 2022, decreased by 29.6% to HKD 1,601,433,000 compared to HKD 2,273,399,000 in the previous year, primarily due to the impact of COVID-19 and strict prevention measures in China[47]. - The annual profit for the year was HKD 15,814,000, down from HKD 227,841,000 in the previous year[55]. - The group reported a profit before tax of HKD 21,670,000, a significant decline from HKD 315,489,000 in the previous year[55]. - The basic earnings per share decreased to HKD 2.50 from HKD 36.07 in the previous year[55]. - The group’s total comprehensive income for the year was HKD 268,500,000, reflecting the impact of foreign exchange differences from overseas operations[1]. - The group’s total comprehensive expenses for the year amounted to HKD 120,455,000, influenced by foreign exchange losses[1]. Cash Flow and Financial Position - Operating cash flow before changes in working capital was HKD 146,679,000, with net cash from operating activities amounting to HKD 76,865,000[35]. - The group reported a net cash decrease of HKD 249,786,000 for the year, with year-end cash and cash equivalents at HKD 536,643,000[35]. - The group's bank deposits and cash amounted to HKD 536,643,000 as of December 31, 2022, compared to HKD 833,586,000 in 2021, with no borrowings reported[91]. - The group has sufficient cash to meet its operational and capital commitments, with no financial impact from the COVID-19 pandemic[93]. Operational Challenges - The group experienced a significant decline in total customer orders due to a contraction in the overall Chinese market, leading to a corresponding decrease in revenue[45]. - The group faced challenges from geopolitical tensions and the ongoing impact of the COVID-19 pandemic, which affected consumer confidence and economic activity[45]. - The management highlighted significant market and inflationary pressures affecting the prices of mold steel raw materials, resulting in increased operational costs[46]. - Demand for household appliances and furniture products continues to decline, and the medical product demand is expected to decrease as the pandemic recedes[197]. Employee and Compensation - The group employed approximately 2,900 employees as of December 31, 2022, with a competitive compensation system in place[94]. - Employee benefit expenses decreased by 23.6% to HKD 436,242,000, while other expenses decreased by 15.2% to HKD 369,563,000[49]. Investment and Assets - The fair value measurement of investment properties is based on observable and unobservable inputs, classified into three levels[85]. - The fair value of investment properties increased by HKD 19,500,000 compared to the same period last year[122]. - The carrying amount of property, plant, and equipment is reviewed for impairment indicators at the end of the reporting period[120]. - The group measures inventory at the lower of cost and net realizable value, with costs determined using the weighted average cost method[170]. Taxation - Income tax expenses decreased by 93.3%, with the effective tax rate reduced to 27.0% (2021: 27.8%)[122]. - Deferred tax assets and liabilities are reviewed at each reporting date and adjusted if it is no longer probable that sufficient taxable profits will be available to recover the assets[176]. Future Outlook - The company will adopt a cautious approach to market changes while striving for sustainable business development in 2023[112]. - The group anticipates that as the pandemic is controlled, Chinese consumer spending will gradually increase, further driving economic growth in the domestic market, although the growth rate remains to be observed[197]. - Raw material and mold steel prices are expected to continue fluctuating due to inflationary pressures, prompting the group to optimize management models and enhance automated production processes to mitigate potential risks and pressures from rising costs[198]. - The group is focused on managing operational costs while improving production efficiency to lower the impact of cost increases[198].

[Performance Announcement Overview](index=1&type=section&id=业绩公告概览) This announcement presents Luen Thai (Bermuda) Group Limited's audited consolidated results for 2022, with comparative 2021 financial data - This announcement presents the audited consolidated results of Luen Thai (Bermuda) Group Limited for the year ended December 31, 2022, with comparative financial data for the same period in 2021[47](index=47&type=chunk)[53](index=53&type=chunk)[79](index=79&type=chunk) [Consolidated Financial Statements](index=1&type=section&id=综合财务报表) This section presents the Group's consolidated financial performance and position, including profit or loss and financial position statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=综合损益及其他全面收益表) The Group's 2022 revenue decreased by 29.6% year-on-year to HK$1,601,433 thousand, with annual profit significantly down 93.1% to HK$15,814 thousand, and basic earnings per share falling to 2.50 HK cents Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$ Thousand) | Metric | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 1,601,433 | 2,273,399 | | Other income, gains and losses | 11,660 | 39,748 | | Increase (decrease) in fair value of investment properties | 6,500 | (13,000) | | Net reversal of impairment losses under expected credit loss model | 5,437 | 179 | | Changes in inventories of finished goods and work-in-progress | 19,116 | (1,874) | | Raw materials and consumables used | (657,603) | (819,753) | | Employee benefit expenses | (436,242) | (571,062) | | Depreciation of property, plant and equipment | (152,796) | (148,189) | | Depreciation of right-of-use assets | (5,909) | (7,919) | | Other expenses | (369,563) | (435,585) | | Interest expense on lease liabilities | (363) | (455) | | Profit before tax | 21,670 | 315,489 | | Income tax expense | (5,856) | (87,648) | | Profit for the year | 15,814 | 227,841 | | Basic earnings per share (HK Cents) | 2.50 | 36.07 | [Consolidated Statement of Financial Position](index=3&type=section&id=综合财务状况表) As of the end of 2022, the Group's total assets slightly decreased, net current assets reduced, and total equity declined by 12.5% year-on-year Consolidated Statement of Financial Position (HK$ Thousand) | Metric | December 31, 2022 (HK$ Thousand) | December 31, 2021 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Investment properties | 175,000 | 168,500 | | Property, plant and equipment | 667,715 | 668,494 | | Right-of-use assets | 73,603 | 80,510 | | Deposits paid for acquisition of property, plant and equipment | 78,583 | 95,283 | | Deferred tax assets | 12,508 | 14,576 | | **Total non-current assets** | **1,007,409** | **1,027,363** | | **Current assets** | | | | Inventories | 606,924 | 604,275 | | Trade, bills and other receivables | 150,501 | 280,508 | | Bank balances and cash | 536,643 | 833,586 | | **Total current assets** | **1,294,068** | **1,718,369** | | **Current liabilities** | | | | Trade, bills and other payables | 135,808 | 249,700 | | Contract liabilities | 21,765 | 32,143 | | Lease liabilities | 3,574 | 3,379 | | Tax payable | 36,264 | 55,486 | | Dividends payable | 295 | 270 | | **Total current liabilities** | **197,706** | **340,978** | | **Net current assets** | **1,096,362** | **1,377,391** | | **Total assets less current liabilities** | **2,103,771** | **2,404,754** | | **Non-current liabilities** | | | | Deferred tax liabilities | 17,903 | 28,270 | | Lease liabilities | 5,986 | 5,643 | | Other payables | 93,301 | 99,569 | | **Total non-current liabilities** | **117,190** | **133,482** | | **Net assets** | **1,986,581** | **2,271,272** | | **Capital and reserves** | | | | Share capital | 63,168 | 63,168 | | Reserves | 1,923,413 | 2,208,104 | | **Total equity** | **1,986,581** | **2,271,272** | [Notes to the Financial Statements](index=5&type=section&id=财务报表附注) This section details the Group's accounting policies, significant judgments, and estimates, along with specific financial disclosures [1. Application of Revised Hong Kong Financial Reporting Standards](index=5&type=section&id=1.%20经修订香港财务报告准则之应用) The Group first applied several revised HKFRSs this year, with no material impact on current or prior period financial statements; new standards issued but not yet effective are also listed, with no expected material impact - The Group first applied several revised Hong Kong Financial Reporting Standards (HKFRS) this year, including HKFRS 3, HKFRS 16, HKAS 16, and HKAS 37[6](index=6&type=chunk)[7](index=7&type=chunk)[57](index=57&type=chunk) - These revisions had no material impact on the Group's financial position, performance, and/or disclosures for the current and prior periods[51](index=51&type=chunk)[52](index=52&type=chunk) - New and revised HKFRSs issued but not yet effective (e.g., HKFRS 17, HKAS 1 and HKAS 8 amendments) are not expected to have a material impact on the Group's consolidated financial statements[8](index=8&type=chunk)[9](index=9&type=chunk)[11](index=11&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk) [2. Revenue and Segment Information](index=7&type=section&id=2.%20收入及分类资料) The Group primarily manufactures and sells mould bases and related products, recognizing revenue when control of goods transfers to customers, operates in a single segment, and has a diversified customer base with no single customer accounting for over 10% of revenue - The Group primarily engages in the manufacturing and sale of mould bases and related products, with revenue recognized upon delivery of goods to customers[13](index=13&type=chunk)[63](index=63&type=chunk)[90](index=90&type=chunk) - The Group operates in a single operating segment with a broad customer base across Europe, America, and Asia, and no single customer accounts for more than **10%** of the Group's revenue[65](index=65&type=chunk)[91](index=91&type=chunk) Revenue by Delivery Location (HK$ Thousand) | Delivery Location | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | China | 1,390,997 | 1,981,499 | | Others | 210,436 | 291,900 | | **Total Revenue** | **1,601,433** | **2,273,399** | [3. Other Income, Gains and Losses](index=8&type=section&id=3.%20其他收入、收益及亏损) The Group's total other income, gains, and losses for 2022 amounted to HK$11,660 thousand, a significant decrease from 2021, primarily due to increased net exchange losses, with HK$3,188 thousand in Covid-19 related government grants recognized this year Other Income, Gains and Losses (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Interest income | 12,300 | 16,193 | | Rental income, net of direct outgoings | 5,524 | 4,602 | | Government grants — Covid-19 related subsidies | 3,188 | — | | Government grants — Others | 352 | 2,670 | | Miscellaneous income | 1,840 | 2,936 | | **Subtotal other income** | **23,204** | **26,401** | | Gain on disposal of property, plant and equipment | 9,822 | 8,108 | | Net exchange (losses) gains | (21,366) | 5,239 | | **Subtotal other gains and losses** | **(11,544)** | **13,347** | | **Total** | **11,660** | **39,748** | - **HK$3,188 thousand** in Covid-19 related government grants were recognized in 2022[15](index=15&type=chunk)[94](index=94&type=chunk) [4. Income Tax Expense](index=9&type=section&id=4.%20所得税开支) The Group's 2022 income tax expense was HK$5,856 thousand, a significant 93.3% decrease from 2021, with Chinese subsidiaries subject to a 25% corporate income tax rate, Hong Kong profits tax using a two-tiered system, and a 5% withholding tax rate on dividends distributed by Chinese foreign-invested enterprises Income Tax Expense (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong profits tax — Current year | 676 | 1,747 | | Hong Kong profits tax — Over-provision in prior years | (16) | (36) | | Taxation in other jurisdictions — Current year | 6,908 | 76,050 | | PRC withholding tax | 5,761 | 12,001 | | Deferred tax — Current year credit | (7,473) | (2,114) | | **Total income tax expense** | **5,856** | **87,648** | - Chinese subsidiaries are subject to a corporate income tax rate of **25%**[17](index=17&type=chunk) - Hong Kong profits tax operates under a two-tiered system, with the first **HK$2 million** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[68](index=68&type=chunk) - A withholding tax rate of **5%** applies to dividends distributed from retained profits of Chinese foreign-invested enterprises, based on the tax treaty between Hong Kong and mainland China[96](index=96&type=chunk) [5. Dividends / 6. Basic Earnings Per Share](index=10&type=section&id=5.%20股息%20/%206.%20每股基本盈利) The Board recommends a final dividend of 6 HK cents per share for 2022, significantly lower than 20 HK cents in 2021, with basic earnings per share for 2022 at 2.50 HK cents, a substantial decrease from 36.07 HK cents in 2021 - The Board has resolved to pay a final dividend of **6 HK cents** per share (2021: 20 HK cents), totaling **HK$37,901 thousand** (2021: HK$126,335 thousand)[19](index=19&type=chunk)[70](index=70&type=chunk) Basic Earnings Per Share | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Profit for the year attributable to owners of the Company (HK$ Thousand) | 15,814 | 227,841 | | Number of ordinary shares | 631,677,303 | 631,677,303 | | Basic earnings per share (HK Cents) | 2.50 | 36.07 | [7. Inventories](index=11&type=section&id=7.%20存货) As of the end of 2022, the Group's total inventories amounted to HK$606,924 thousand, largely consistent with 2021, with a slight decrease in raw materials and an increase in work-in-progress and finished goods Inventories (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Raw materials | 514,061 | 530,528 | | Work-in-progress | 81,284 | 67,213 | | Finished goods | 11,579 | 6,534 | | **Total inventories** | **606,924** | **604,275** | - The cost of inventories recognized as an expense during the year was **HK$1,346,819 thousand** (2021: HK$1,656,164 thousand)[71](index=71&type=chunk) [8. Trade, Bills and Other Receivables](index=11&type=section&id=8.%20贸易、票据及其他应收款项) As of the end of 2022, the Group's total trade, bills, and other receivables were HK$150,501 thousand, a significant 46.3% decrease from 2021, with most trade receivables due within 60 days according to the aging analysis Trade, Bills and Other Receivables (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables | 91,702 | 152,642 | | Less: Provision for credit losses | (8,921) | (15,407) | | Bills receivable | 13,241 | 22,421 | | Other receivables | 3,110 | 2,931 | | Prepayments for materials | 46,858 | 110,780 | | Deposits and prepayments | 4,511 | 7,141 | | **Total** | **150,501** | **280,508** | Aging of Trade Receivables (HK$ Thousand) | Aging of trade receivables | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 86,508 | 136,833 | | 61 to 90 days | 12,187 | 26,443 | | Over 90 days | 6,248 | 11,787 | | **Total** | **104,943** | **175,063** | - The Group grants credit periods ranging from **30 to 90 days** to its trade customers[13](index=13&type=chunk)[100](index=100&type=chunk) [9. Trade, Bills and Other Payables](index=12&type=section&id=9.%20贸易、票据及其他应付款项) As of the end of 2022, the Group's total trade, bills, and other payables amounted to HK$229,109 thousand, a 34.4% decrease from 2021, with significant reductions in both trade payables and bills payable Trade, Bills and Other Payables (HK$ Thousand) | Item | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 30,535 | 43,792 | | Bills payable | 847 | 13,757 | | VAT payables | 11,035 | 28,862 | | Employee benefit provisions | 102,847 | 129,194 | | Salaries and bonuses payable | 36,031 | 78,886 | | Deposits and accrued charges | 24,742 | 27,028 | | Other payables | 23,072 | 27,750 | | **Total** | **229,109** | **349,269** | | Less: Amount due within one year shown under current liabilities | (135,808) | (249,700) | | Amount due after one year | 93,301 | 99,569 | Aging of Trade Payables (HK$ Thousand) | Aging of trade payables | 2022 (HK$ Thousand) | 2021 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 60 days | 23,494 | 46,009 | | 61 to 90 days | 4,334 | 7,166 | | Over 90 days | 3,554 | 4,374 | | **Total** | **31,382** | **57,549** | - The credit period for purchases of goods ranges from **30 to 150 days**[102](index=102&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=管理层之讨论及分析) This section offers management's insights into the Group's operational and financial performance, liquidity, and future outlook [Business Review](index=13&type=section&id=业务回顾) In 2022, the Group's revenue decreased by 29.6% year-on-year, and profit significantly dropped by 93.1%, primarily due to recurring COVID-19 outbreaks in China, stringent measures, adverse global economic factors, and rising raw material costs, leading to a substantial decline in total market orders - In 2022, the Group's revenue decreased by **29.6%**, profit decreased by **93.1%**, and basic earnings per share were **2.50 HK cents**[119](index=119&type=chunk) - The revenue decrease was primarily due to recurring COVID-19 outbreaks in China, stringent epidemic prevention measures, and adverse global economic factors leading to a substantial decline in total market orders[76](index=76&type=chunk)[77](index=77&type=chunk)[104](index=104&type=chunk) - Increased raw material costs and relatively fixed operating costs, which could not be offset by product price adjustments, resulted in a significant reduction in gross profit and net profit[104](index=104&type=chunk)[105](index=105&type=chunk) - Global economic slowdown, geopolitical tensions, disruptions in international shipping, and escalating global inflationary pressures further hampered global economic recovery, impacting the Group's export orders[120](index=120&type=chunk) [Financial Review and Liquidity](index=14&type=section&id=财务回顾) The Group's 2022 profit significantly decreased by 93.1% to HK$15,814 thousand; raw materials and consumables costs decreased by 22.3% but increased as a percentage of revenue; total equity declined by 12.5% year-on-year, and bank balances and cash decreased by 35.7%, yet the Group remains debt-free with ample cash - Profit for 2022 decreased by **93.1%** to **HK$15,814 thousand**[30](index=30&type=chunk) - Raw materials and consumables costs decreased by **22.3%**, but their proportion of revenue increased to **39.9%** (2021: 36.1%)[21](index=21&type=chunk) - Fair value of investment properties increased by **HK$19,500 thousand**, net reversal of expected credit loss provisions increased by **HK$5,258 thousand**, while other income decreased by **HK$28,088 thousand** (primarily due to increased net exchange losses)[106](index=106&type=chunk) - Income tax expense decreased by **93.3%**, with the effective tax rate falling to **27.0%** (2021: 27.8%)[106](index=106&type=chunk) - As of the end of 2022, the Group's total equity was **HK$1,986,581 thousand** (2021: HK$2,271,272 thousand), bank balances and cash were **HK$536,643 thousand** (2021: HK$833,586 thousand), with no borrowings[122](index=122&type=chunk) - The Group possesses ample cash to meet its operating and capital commitments, and the COVID-19 pandemic has not affected its financial position[123](index=123&type=chunk) [Employees and Remuneration Policy](index=14&type=section&id=雇员及薪酬政策) As of the end of 2022, the Group employed approximately 2,900 staff, implementing a competitive remuneration system where promotions and salary increments are performance-based, and share options may be granted - As of the end of 2022, the Group employed approximately **2,900 staff**[31](index=31&type=chunk) - The Group implements a competitive remuneration system, with promotions and salary increments based on performance, and share options may be granted[31](index=31&type=chunk) [Outlook](index=15&type=section&id=展望) The Group anticipates a challenging short-term global economic recovery, with continued weak overseas demand and pressure on China's export business; while China's domestic market is expected to grow, a weak property sector will impact home appliance and furniture demand, medical product demand will decline, but new energy vehicle mould demand is projected to increase; the Group will adapt to market trends, optimize management, and enhance automated production to address challenges and achieve sustainable development - The Group anticipates a challenging short-term global economic recovery, with European geopolitical conflicts, energy shortages, Sino-US trade frictions, high inflation, and interest rate hikes leading to continued weak overseas market demand and pressure on China's export business[33](index=33&type=chunk) - As the pandemic subsides, Chinese consumer spending is expected to gradually increase, potentially driving economic growth in the domestic market, but a weak property sector will lead to continued reduced demand for home appliances and furniture products[24](index=24&type=chunk) - Demand for medical products will decline as the pandemic recedes, while demand for new technology electronic consumer products is improving, and new energy vehicle consumption is expected to drive the development of automotive moulds[24](index=24&type=chunk) - The Group will closely follow market trends to explore business opportunities, enhance market competitiveness, optimize management models, and improve automated production processes to mitigate rising cost risks and achieve sustainable development[24](index=24&type=chunk)[109](index=109&type=chunk) - The business environment in 2023 remains challenging, and the Group will adopt a cautious and rigorous approach to market changes[34](index=34&type=chunk) [Other Important Information](index=16&type=section&id=其他重要信息) This section covers corporate governance, auditor's review, dividend proposals, and share transaction details [Audit Committee and Auditor's Scope](index=16&type=section&id=审核委员会) The Audit Committee has reviewed the Group's accounting principles, internal control measures, and financial reporting matters, including the consolidated financial statements; the Group's auditor, Deloitte Touche Tohmatsu, has agreed that the financial figures in this preliminary announcement are consistent with the audited consolidated financial statements - The Audit Committee, in conjunction with management, has reviewed the Group's adopted accounting principles and practices, and discussed internal control measures and financial reporting matters, including the consolidated financial statements[26](index=26&type=chunk)[35](index=35&type=chunk) - The financial figures contained in this preliminary announcement of results have been agreed by the Group's auditor, Deloitte Touche Tohmatsu, to the amounts set out in the audited consolidated financial statements approved by the Board[36](index=36&type=chunk)[111](index=111&type=chunk) [Final Dividend and Closure of Register of Members](index=16&type=section&id=末期股息) The Board recommends a final dividend of 6 HK cents per share and has announced specific dates for the closure of the register of members to determine eligibility for attending the Annual General Meeting and receiving the dividend - The Board recommends a final dividend of **6 HK cents** per share for the year ended December 31, 2022[27](index=27&type=chunk)[112](index=112&type=chunk) - To qualify for attending and voting at the Annual General Meeting, the register of members will be closed from May 23, 2023, to May 29, 2023[37](index=37&type=chunk)[38](index=38&type=chunk)[112](index=112&type=chunk) - To qualify for the proposed final dividend, the register of members will be closed from June 6, 2023, to June 7, 2023[39](index=39&type=chunk)[113](index=113&type=chunk) [Securities Transactions and Corporate Governance](index=17&type=section&id=企业管治) For the year ended December 31, 2022, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities; the Company has consistently complied with all code provisions of the Corporate Governance Code during the reporting period - For the year ended December 31, 2022, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities[40](index=40&type=chunk)[114](index=114&type=chunk) - The Company has consistently complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[44](index=44&type=chunk)[115](index=115&type=chunk) - The announcement lists the executive and independent non-executive directors of the Company[41](index=41&type=chunk)[116](index=116&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 907,552,000, a decrease of 23.6% compared to HKD 1,189,026,000 for the same period in 2021[8] - The company reported a profit before tax of HKD 53,901,000, down 64.9% from HKD 153,365,000 in the previous year[8] - Basic earnings per share decreased to HKD 6.49 from HKD 17.10, reflecting a decline of 62.0%[8] - Total comprehensive income for the period was a loss of HKD 40,453,000, compared to a gain of HKD 118,746,000 in the prior year[8] - The group reported a profit of HKD 40,988,000 for the six months ended June 30, 2022, a decline of 62.0% compared to HKD 108,040,000 in the same period last year[39] - The profit attributable to the owners of the company for the same period was HKD 40,988,000, down 62.1% from HKD 108,040,000 in 2021[59] Assets and Liabilities - Non-current assets as of June 30, 2022, totaled HKD 1,032,044,000, slightly up from HKD 1,027,363,000 at the end of 2021[10] - Current assets decreased to HKD 1,481,181,000 from HKD 1,718,369,000, indicating a decline of 13.8%[10] - Total liabilities decreased to HKD 283,480,000 from HKD 340,978,000, reflecting a reduction of 16.9%[12] - The company's net assets decreased to HKD 2,104,484,000 from HKD 2,271,272,000, a decline of 7.3%[12] - The total equity of the group as of June 30, 2022, was HKD 2,104,484,000, down from HKD 2,271,272,000 as of December 31, 2021[60] Cash Flow and Expenses - The company's cash and cash equivalents decreased significantly to HKD 603,565,000 from HKD 833,586,000, a drop of 27.5%[10] - Operating cash flow before changes in working capital for the six months ended June 30, 2022, was HKD 111,716,000, compared to HKD 229,329,000 in the previous year, reflecting a significant decline[16] - The net cash used in operating activities for the six months ended June 30, 2022, was HKD 98,335,000, compared to HKD 75,323,000 in the same period of 2021[16] - Total expenses decreased to HKD 191,527,000 for the six months ended June 30, 2022, down 22.1% from HKD 245,943,000 in the previous year[30] - The cost of goods sold for the six months ended June 30, 2022, was HKD 723,741,000, down from HKD 872,397,000 in the previous year, indicating a reduction of 17.0%[35] Market and Operational Insights - The company has not disclosed any new product developments or market expansion strategies in the current report[8] - The company reported a decrease in revenue from the China market to HKD 787,688,000 for the six months ended June 30, 2022, compared to HKD 1,037,422,000 in the same period of 2021, representing a decline of 24.0%[27] - The group anticipates a continued slowdown in the domestic market in China, with consumer spending becoming more cautious due to unclear prospects[64] - Demand for medical products remains stable due to the ongoing pandemic, while the demand for environmentally friendly new energy vehicles continues to grow[64] - The international shipping sector is unlikely to recover smoothly in the short term due to ongoing supply chain disruptions and shortages of chips and imported components[64] Dividends and Shareholder Information - The company declared a final dividend of HKD 126,335,000 for the year ended December 31, 2021[16] - The interim dividend declared was HKD 0.06 per share, totaling HKD 37,901,000, down from HKD 0.15 per share and HKD 94,752,000 in the previous year[37] - As of June 30, 2022, Pan Island Investments Limited holds 366,210,937 shares, representing 57.97% of the company's issued share capital[81] - HSBC International Trustee Limited, as a trustee, holds 366,514,990 shares, accounting for 58.02% of the company's issued share capital[81] - David Michael Webb owns 37,938,498 shares, which is 6.00% of the company's issued share capital[81] Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code as set out in the Listing Rules during the review period[85] - The company has adopted the standard code of conduct for securities transactions by directors as per the Listing Rules[86] - All directors have confirmed compliance with the standard code throughout the review period[87] Future Outlook and Strategies - The group will strengthen its marketing team and network to explore market opportunities and actively seek orders to ensure stable revenue[64] - The group plans to integrate production processes, promote automation, and improve management systems to control rising operational costs[65] - The board has approved a new share option plan to attract and retain skilled participants for future development and expansion[77] - The global economic recovery faces significant challenges, including geopolitical instability, recurring COVID-19 variants, and persistent high inflation risks, leading to uncertainty in business prospects[64] - The group's operational costs are expected to rise, although the price of raw materials for mold steel may slightly decrease due to reduced demand[65]

Financial Performance - The group's revenue for the year ended December 31, 2021, was approximately HKD 2,273,399,000, an increase from HKD 2,064,882,000 in 2020[10]. - The profit attributable to the owners of the company for the same period was approximately HKD 227,841,000, compared to HKD 181,081,000 in 2020[10]. - Basic earnings per share for the year were HKD 0.3607, up from HKD 0.2867 in the previous year[10]. - The group's revenue for the year ended December 31, 2021, increased by 10.1% compared to the previous year[21]. - The group's profit after tax increased by 25.8% to HKD 227,841,000 for the year ended December 31, 2021, compared to HKD 181,081,000 in 2020[21]. - The cost of materials and consumables used to generate revenue increased by 8.0%, while the percentage of these costs in relation to revenue decreased to 36.1% from 36.9% in 2020[21]. - The actual tax rate increased to 27.8% from 18.0% in 2020, primarily due to prior year adjustments and increased recognition of deferred tax assets[21]. - Cash and bank deposits amounted to approximately HKD 833,586,000 as of December 31, 2021, down from HKD 918,623,000 in the previous year[22]. - The group maintained a total equity of approximately HKD 2,271,272,000 as of December 31, 2021, slightly down from HKD 2,274,394,000 a year earlier[22]. Market Outlook - The group anticipates continued pressure on the Chinese consumer products market, with a slowdown expected due to a cooling real estate market and reduced demand for home appliances[11]. - The outlook for the global economy remains uncertain, influenced by geopolitical tensions and supply chain disruptions[11]. - The demand for new technology electronic products is expected to remain positive, despite challenges in the electric vehicle sector due to standardization and charging infrastructure issues[11]. Operational Strategy - The group plans to adjust product prices in response to fluctuating raw material and steel prices due to inflationary pressures[13]. - The group is focusing on the development of core businesses and improving internal production and management to achieve stable growth and healthy returns[13]. - The impact of the COVID-19 pandemic remains a concern, with potential disruptions to operations due to outbreaks in mainland China[13]. - The group will integrate marketing strategies and networks to strengthen its competitive advantage in response to global market trends[11]. Corporate Governance - The company has established a Nomination Committee consisting of four independent non-executive directors, which held four meetings in the fiscal year ending December 31, 2021, with full attendance from all members[45][46]. - The Nomination Committee confirmed that the board members possess diverse skills, professional knowledge, experience, and qualifications, ensuring the board is capable of fulfilling its responsibilities[46]. - The company’s board diversity policy emphasizes the importance of diversity in enhancing overall performance, considering factors such as gender, age, cultural and educational background, and professional experience[64]. - The company’s independent non-executive directors actively participate in board meetings, providing independent judgment on strategy, policy, and company performance[41]. - The company has a structured process for evaluating the independence of all independent non-executive directors, ensuring compliance with the independence standards set forth in the listing rules[47]. - The Nomination Committee is responsible for reviewing the board's structure, size, and diversity, making recommendations for any changes to the board[45]. - The company’s board has distinct roles for the Chairman and the Managing Director, with the Chairman leading the board and the Managing Director implementing the board-approved strategies[40]. - The company has a policy for annual self-assessment of the board members to ensure effective governance[55]. - The Nomination Committee will review the nomination policy periodically to ensure its effectiveness and propose any necessary amendments to the board[63]. - The company maintains a clear framework for the powers and responsibilities of its committees, including the Audit, Nomination, and Remuneration Committees, which report their findings to the board after each meeting[42]. Audit and Risk Management - The Audit Committee held four meetings during the fiscal year ending December 31, 2021, reviewing quarterly performance and internal audit results[74]. - The Audit Committee recommended the approval of the consolidated financial statements for the year ending December 31, 2020, and the interim results for the six months ending June 30, 2021[76]. - The Audit Committee evaluated the effectiveness of the group's risk management and internal control systems, reporting findings to the board[80]. - The company confirmed that there are no significant uncertainties that could severely impact its ability to continue as a going concern[90]. - The company’s board of directors is responsible for preparing financial statements that reflect the group's true and fair state of affairs[90]. - The board confirmed its responsibility for overseeing the group's risk management and internal control systems, with annual reviews conducted by the risk management and internal control review task force[91]. - The internal audit department regularly reports to the board and audit committee on the effectiveness of internal controls, identifying any significant weaknesses or failures in procedures[94]. - The audit committee and board found no significant issues that would materially affect the group's financial condition or operational performance, deeming the risk management and internal control systems sufficient and effective[102]. - The fees paid to the external auditor for the fiscal year ending December 31, 2021, totaled HKD 3,100,000 for audit services and HKD 568,000 for interim review services[104]. ESG Commitment - The company aims to balance dividend distribution, maintaining sufficient liquidity, and seizing future growth opportunities to create long-term value for shareholders[115]. - The board of directors will consider the company's current financial performance and future financial requirements when recommending or declaring dividends[116]. - The company has established a rigorous ESG governance framework to assist the board in overseeing ESG-related matters[134]. - The ESG governance structure includes the board being ultimately responsible for the overall ESG vision and long-term sustainable development goals[135]. - The company will review its dividend policy periodically to ensure its effectiveness and may update or modify the policy as necessary[121]. - The ESG report is prepared in accordance with the guidelines set forth by the Hong Kong Stock Exchange, ensuring transparency and accountability[126]. - The report covers the company's manufacturing and sales operations in Guangdong and Zhejiang provinces, which are the core operations and main revenue sources[127]. - The company emphasizes ethical and responsible business practices as part of its corporate culture[134]. - The board will approve the overall ESG policies and strategies, as well as review the company's ESG performance[135]. - The company is committed to integrating sustainable development goals into its overall strategic direction[134]. Environmental Performance - The total GHG emissions for the year were 61,250 tons CO2 equivalent, a decrease of 7.2% from 68,758 tons in the previous year[155]. - Direct emissions (Scope 1) from diesel were 384 tons, an increase of 2.9% from 373 tons in the previous year[155]. - Indirect emissions (Scope 2) from purchased electricity were 60,521 tons, a decrease of 11% from 68,011 tons in the previous year[155]. - The GHG emissions per square meter of floor area were 0.19 tons CO2 equivalent, down from 0.21 tons in the previous year[155]. - The board has set strategic goals and indicators for the next three to five years to focus on achieving ESG vision[141]. - The company has established multiple environmental protection policies aimed at reducing emissions and conserving energy[154]. - The company engages with stakeholders through various channels to understand their expectations regarding ESG aspects[143]. - The company has identified and prioritized ESG projects based on their importance to the business and stakeholders[148]. - The company is committed to enhancing ESG risk management and internal controls to safeguard long-term stakeholder interests[141]. - The company’s operations are compliant with all applicable environmental protection laws and regulations in China[154]. - GHG emissions for Scope 1 totaled 712 tons, a decrease from 721 tons in 2020[2]. - Total hazardous waste generated was 207 tons, down from 370 tons in 2020, indicating a reduction of approximately 44%[160]. - Total non-hazardous waste generated was 39,498 tons, compared to 43,261 tons in 2020, reflecting a decrease of about 8%[160]. - Direct energy consumption was 1,969 MWh, a reduction from 2,033 MWh in 2020[167]. - Total energy consumption was 77,434 MWh, down from 79,455 MWh in 2020, representing a decrease of approximately 2.5%[167]. - Total water consumption was 490,418 cubic meters, significantly lower than 582,567 cubic meters in 2020, marking a reduction of about 16%[171]. - Total packaging materials used was 1,582 tons, slightly down from 1,587 tons in 2020[172]. - The company implemented energy-saving measures, including the use of high-efficiency production equipment and promoting recycling awareness among employees[170]. - The company has set annual energy-saving targets and continues to seek energy-saving potential and directions[166]. - The company has established a "Energy Saving Team" to ensure the effectiveness of environmental protection policies and monitor their implementation[166]. - The Chinese factory has implemented energy-saving and emission-reduction measures, including replacing old machinery with new ones, improving efficiency and reducing energy consumption[174]. Employee Management - As of December 31, 2021, the Chinese factory employed a total of 3,007 employees, with 2,601 males and 406 females[183]. - The employee turnover rate for 2021 was 16%, with 564 employees leaving the company, including 482 males (16%) and 82 females (17%)[184]. - Employees received a total of 22,015 hours of training in the Chinese factories during the year[194]. - The average training hours per employee was 7 hours, with 98% of employees receiving training[195]. - Male employees received an average of 7 hours of training (99% participation), while female employees received 10 hours (97% participation)[195]. - Senior management received an average of 2 hours of training (68% participation), while middle management received 9 hours (97% participation)[195]. - The company adheres strictly to labor laws and regulations in China to enforce its labor standards[196]. - The company emphasizes collaboration with suppliers who share its values and maintains a rigorous supplier selection process[197]. - The company has established policies to identify, assess, monitor, and manage environmental and social risks in its supply chain[197]. - The company is committed to reducing potential environmental and social risks that may impact its supply chain[197].