Economic Overview - In 2021, China's economy grew by 8.1%, with final consumption expenditure contributing 65.4% to this growth[5] - In 2021, China's GDP reached RMB 114 trillion, with a year-on-year growth of 8.1%[19] - The total retail sales of consumer goods in China amounted to RMB 44.1 trillion, increasing by 12.5% year-on-year[19] - The export of intermediate products from China grew by 28.6% due to effective pandemic control and global economic recovery[19] Company Performance - Revenue increased from approximately RMB 850.3 million for the year ended December 31, 2020, to approximately RMB 871.6 million for the year ended December 31, 2021, representing an increase of approximately RMB 21.3 million or 2.5%[26] - Sales from self-owned brand products rose by approximately RMB 31.3 million to RMB 500.7 million, a growth of 6.7% compared to the previous year[27] - The company recorded revenue of approximately RMB 871.6 million, gross profit of RMB 235.1 million, and net profit before the cancellation of consolidated accounting losses of RMB 147.3 million for the year 2021[86] - The company reported a net loss of RMB 939,000 for the year, compared to a profit of RMB 149.135 million in 2020[142] Product Development and Innovation - The group launched new products such as dual-color mixed fruit canned products and black sugar pear canned products, which received positive market feedback[6] - The group is committed to developing new products that cater to consumer needs and promoting both its own brands and OEM business[7] - The company launched new products under its own brands, including canned fruit with new packaging, which received widespread acclaim[20] - The group aims to diversify its product line and has plans to launch more new flavors, including juice vitamin sports drinks and fruit pulp beverages[25] - The company focuses on R&D innovation, improving product quality, and enhancing production efficiency to strengthen its core competitiveness[86] Production Capacity and Expansion - The group plans to invest in a comprehensive production base in Yunnan, with a designed capacity of 90,000 tons per year, focusing on canned fruits, beverages, and jellies[7] - The group has successfully expanded its production capacity in Shandong and Yunnan, which will enhance its market coverage in China[7] - The new Yunnan production base project covers over 130,000 square meters with a planned annual capacity of 90,000 tons, focusing on tropical and subtropical processed fruit products[23] - The group has completed the construction of new production workshops in Shandong, which are expected to be operational by the end of 2022[22] Financial Challenges and Governance Issues - The forensic investigation report indicated unauthorized transactions amounting to approximately RMB 344 million related to loan transfers[13] - The company lost control over Yichang Tiantong Group as of December 23, 2021, due to internal control failures and misconduct by senior management[14] - The board decided to deconsolidate Yichang Tiantong Group's financial results from January 1, 2021, due to the loss of control[13] - The forensic investigation findings led to a series of actions taken by the company to regain control, which ultimately proved unsuccessful[13] - The company faced challenges in obtaining necessary accounting records from Yichang Tiantong Group for the audit[17] Corporate Governance - The company remains committed to maintaining high standards of corporate governance to enhance shareholder value[47] - The company ensures that independent non-executive directors make up at least one-third of the board, providing strong support for effective governance[54] - The Audit Committee's main responsibilities include overseeing internal audit functions and risk management systems[58] - The company has established policies and processes for managing insider information, ensuring compliance and training for relevant personnel[76] Risk Management and Internal Controls - The Risk Management and Internal Control system is designed to identify and mitigate risks affecting the achievement of the company's strategic goals[68] - The company has a systematic risk management approach under the supervision of the board to comply with the revised corporate governance code requirements[68] - The company identified two significant internal control deficiencies related to unauthorized transactions exceeding RMB 20 million and non-operational payments over RMB 3 million[73] - The company’s risk management and internal control systems are continuously being improved to enhance their effectiveness[72] Shareholder and Market Relations - The company maintains good relationships with customers and suppliers, which is crucial for achieving its medium to long-term business goals[87] - The company recorded a total of approximately RMB 120,000 in donations for the review year, a decrease from RMB 264,000 in 2020[105] - The top five customers accounted for approximately 14.3% of total revenue, with the largest customer contributing about 4.5%[100] - The top five suppliers represented approximately 23.1% of total procurement, with the largest supplier accounting for about 4.8%[100] Financial Management and Investments - The company has not made any significant acquisitions or disposals of subsidiaries or associates during the reporting period[46] - The company has no significant investments as of December 31, 2021[98] - The company’s total liabilities decreased from RMB 347,153 thousand in 2020 to RMB 262,302 thousand in 2021, a decrease of approximately 24.48%[144] - The company’s net cash used in investing activities was RMB 237,059 thousand in 2021, compared to RMB 103,403 thousand in 2020, indicating a significant increase in investment outflows[147] Compliance and Regulatory Matters - The company adopted several accounting standards revisions during the reporting period, including HKFRS 9 and HKFRS 16, which did not have a significant impact on the consolidated financial statements[152] - The independent auditor's report indicates that the company’s consolidated financial statements were prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance, although no opinion was expressed due to insufficient audit evidence[137] - The company is seeking legal advice to regain control over Yichang Tian Tong Group and its subsidiaries[153] Management and Leadership - The company has a strong management team with members like Mr. Jiang Yubao, who has been managing Shandong Tiantong since February 2019, and has a background in trade and sales[135] - The Chief Financial Officer, Mr. He Haodong, oversees corporate strategy, finance, capital markets, and investor relations, bringing extensive experience from previous roles in various financial institutions[134] - The executive director, Yang Ziyuan, has been with the company since September 8, 2011, overseeing overall business planning and strategic development[126] Environmental and Social Responsibility - The company is committed to reducing greenhouse gas emissions and improving its energy mix through technological advancements[88] - The company emphasizes the importance of employee relations and has established comprehensive human resource management programs[89]
天韵国际控股(06836) - 2022 - 年度财报