Financial Performance - The company achieved record sales of $222.9 million and a net profit of $17.1 million for the fiscal year 2024, marking a 9.8% increase in net profit compared to the previous year[7]. - The company reported a record net cash of $34.1 million, representing 54.0% of the net asset value of $63.0 million at year-end[7]. - Revenue and net profit increased by 83% and 139% respectively compared to 2019, prior to the industry's volatility[8]. - The group's revenue increased by approximately 6.9% from about $208.5 million in 2023 to about $222.9 million in 2024, driven by new customer acquisition and deeper penetration with existing customers[18]. - Cost of sales rose by approximately 7.3% from about $148.6 million in 2023 to about $159.4 million in 2024, with the cost of sales as a percentage of total revenue slightly increasing from about 71.3% to about 71.5%[19]. - Gross profit increased by approximately 6.0% from about $59.9 million in 2023 to about $63.5 million in 2024, with a stable gross margin slightly declining from about 28.7% to about 28.5%[20]. - Net profit for the year ended December 31, 2024, was approximately $17.1 million, up from about $15.6 million in 2023, marking the highest net profit in the company's history[21]. - The increase in net profit of approximately $1.5 million was primarily due to a gross profit increase of about $3.6 million from new and existing customers, alongside a reduction in administrative expenses from about $20.1 million in 2023 to about $19.4 million in 2024[22]. - Cash and cash equivalents as of December 31, 2024, were approximately $34.1 million, up from $18.1 million in 2023, with a net cash position of about $34.1 million, a historical high[25]. - The current ratio improved to approximately 2.8 times in 2024 from about 2.4 times in 2023, indicating a relatively strong liquidity position[25]. - The debt-to-equity ratio remained at approximately 0% as of December 31, 2024, due to no bank borrowings, with a net debt-to-equity ratio of about -54.0%[26]. Corporate Governance - The board consists of three executive directors and four independent non-executive directors, with TAN William appointed as CEO effective April 1, 2024[45]. - The company emphasizes the importance of board diversity, aiming to appoint two female directors to enhance gender diversity, currently having one female director[54][55]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific responsibilities and resources[56]. - The company has received annual written confirmations of independence from all independent non-executive directors, affirming their compliance with independence requirements[50]. - The board is responsible for strategic decisions, including approving significant capital expenditures and acquisitions[48]. - The company is committed to maintaining high standards of corporate governance and effective risk management systems[48]. - The board regularly reviews its diversity policy to ensure its effective implementation[55]. - The company has a clear separation of roles between the Chairman and the CEO to ensure proper governance[49]. - The board believes it has achieved a sufficient balance of power and authority between itself and the management team[49]. - The company is focused on enhancing its operational effectiveness through diverse skills and experiences among board members[54]. - The audit committee held two meetings during the review year to oversee the company's financial reporting, risk management, and internal control systems[59]. - The remuneration committee also conducted two meetings to review the company's remuneration policies and the compensation of individual directors and senior management[62]. - The nomination committee held two meetings to assess the composition of the board and to establish policies for the nomination and appointment of directors[63]. - The board of directors conducted a minimum of four meetings within the year to discuss the group's financial performance and strategic development[65]. - The company has a policy for the appointment and re-election of directors, ensuring a formal and transparent process[68]. - All directors are required to retire and seek re-election at least once every three years at the annual general meeting[71]. - The audit committee is composed of four independent non-executive directors, ensuring appropriate professional qualifications[59]. - The remuneration committee is responsible for establishing a transparent process for determining the remuneration of directors and senior management[62]. - The nomination committee evaluates the independence of non-executive directors and considers diversity factors in board composition[63]. - The company has established a risk management system to monitor financial controls and internal audits[60]. - The company has arranged appropriate insurance coverage for potential legal actions against its directors and senior officers[75]. - The board of directors has confirmed compliance with the standard code of conduct for securities trading as of December 31, 2024[77]. - The company has implemented a risk management framework, which includes the board of directors, the audit committee, and senior management, to oversee risk management and internal control systems[84]. - The board has conducted an annual review of the effectiveness of the risk management and internal control systems, concluding that they are adequate and effective for the year ending December 31, 2024[87]. - The company has adopted a code of conduct for securities trading, ensuring that all directors are aware of their responsibilities under applicable laws and regulations[77]. - The internal audit reports and corporate risk assessment reports are submitted to the audit committee and the board at least annually[87]. - The company has established procedures for the immediate disclosure of inside information as required by the Securities and Futures Ordinance and listing rules[88]. - The company secretary has completed no less than 15 hours of relevant professional training during the year ending December 31, 2024[79]. - The board believes that the company has adopted appropriate accounting policies and has consistently applied them in preparing the financial statements[83]. Dividend Policy - The company has adopted a dividend policy that considers factors such as overall financial condition, operational and liquidity needs, and future cash requirements[97]. - The board will continuously review the dividend policy and may exercise discretion to update or modify it as deemed appropriate[99]. Shareholder Communication - The company emphasizes the importance of communication with shareholders and has established diverse channels to ensure timely access to information[95]. - The board recognizes its responsibility to enhance shareholder value and communicate effectively with investors[95]. - The company has established a process for shareholders to submit inquiries to the board[94]. - The company will hold an annual general meeting to facilitate communication between the board and shareholders[95]. ESG Initiatives - The ESG report covers the company's environmental and social performance for the fiscal year ending December 31, 2024[105]. - The ESG report is prepared in accordance with the guidelines set by the Hong Kong Stock Exchange[106]. - The establishment of a dedicated ESG committee by the board to enhance ESG governance and risk management measures[111]. - The ESG committee has engaged third-party professionals to manage the company's ESG performance and identify significant issues for stakeholders[113]. - A comprehensive materiality assessment was conducted to identify the most important ESG issues, resulting in 10 key topics prioritized for sustainability efforts[126]. - Key identified ESG issues include environmental compliance, waste management, and supply chain risks[127]. - The company actively communicates with stakeholders through various channels to understand their expectations regarding ESG matters[113]. - The board oversees departmental coordination to set clearer ESG goals and indicators[111]. - Stakeholder engagement includes regular meetings with regulatory bodies and transparent communication with shareholders[115]. - The company emphasizes the importance of compliance with national policies and regulations as a key expectation from stakeholders[115]. - The ESG committee is responsible for monitoring stakeholder communication channels to ensure their views and expectations are met[111]. - The company aims to integrate sustainable development strategies into long-term business practices based on stakeholder feedback[113]. Environmental Impact - The total greenhouse gas emissions for 2024 were 504.25 tons of CO2 equivalent, a slight increase from 495.76 tons in 2023, indicating a stable trend in emissions[134]. - Scope 2 emissions, which include indirect emissions from purchased electricity, were 358.23 tons of CO2 equivalent in 2024, up from 351.06 tons in 2023[134]. - Scope 3 emissions, covering other indirect emissions, were 146.0 tons of CO2 equivalent in 2024, compared to 144.7 tons in 2023[134]. - The company achieved carbon neutrality and received the PAS 2060 certification for carbon neutrality, reflecting its commitment to reducing its carbon footprint[131]. - The company has signed the Fashion Industry Charter for Climate Action, demonstrating its commitment to a low-carbon future[131]. - The company has been recognized with the B-Corp certification, highlighting its efforts in social and environmental responsibility[130]. - The company has implemented various carbon reduction measures, including replacing all passenger vehicles with electric vehicles this year[132]. - The company aims to continuously optimize operations to maintain carbon neutrality and contribute to global climate change mitigation[132]. - The company has established a working group to monitor and report on extreme weather-related information, addressing climate-related risks[140]. - The company has received recognition from the Science Based Targets initiative (SBTi) for its commitment to reducing its carbon footprint[137]. - Total energy consumption in Shenzhen office for 2024 was 643.4 MWh, an increase of 2.9% from 630.5 MWh in 2023[142]. - The density of energy consumption per employee in 2024 was 1.85 MWh, slightly up from 1.84 MWh in 2023[142]. - Non-hazardous waste generated in 2024 was 60.8 tons, a significant decrease of 46.7% from 114.2 tons in 2023[150]. - Hazardous waste generated in 2024 was 3.5 kg, down 83.3% from 21.0 kg in 2023[150]. - Total water consumption in Shenzhen office for 2024 was 3,876 cubic meters, an increase of 14.9% from 3,372 cubic meters in 2023[152]. - Water consumption density per employee in 2024 was 11.17 cubic meters, up from 9.83 cubic meters in 2023[152]. - The company is committed to using sustainable materials, including organic cotton and recycled polyester, to minimize environmental impact[146]. - The company has implemented strict measures for chemical management to comply with ZDHC MRSL requirements[147]. - The company aims to transition energy sources from fossil fuels to renewable energy as a short-term goal[142]. - The company promotes a culture of reducing, reusing, and recycling (3R) among employees to minimize waste[148]. Employee Welfare - The company recorded zero workplace injuries and lost workdays due to injuries in 2023, maintaining a safe working environment[156]. - Average training hours per employee decreased from 7.7 hours (53% trained) in 2023 to 2.3 hours (60% trained) for mid-level employees in 2024[162]. - The percentage of female employees increased from 29% in 2023 to 30% in 2024, while the percentage of male employees decreased from 33% to 26%[172]. - The employee turnover rate for 2024 was not specified, but the company emphasizes conducting exit interviews to understand reasons for departures[173]. - The company provides various employee benefits, including discretionary bonuses and training, to retain talent and enhance employee satisfaction[158]. - The company adheres to local laws regarding social insurance and housing fund contributions for employees[158]. - Employee training programs were organized to enhance skills in various areas, including customer service and supply chain management[159]. - The company ensures compliance with labor laws, including prohibitions against child labor, and conducts identity verification for new hires[173]. - The company emphasizes the importance of a balanced work-life environment by organizing monthly social events and celebrations[158]. Supply Chain Management - The company actively manages its supply chain and monitors the quality of raw materials and products to ensure sustainable business operations[175]. - The company has established a strict supplier selection process, evaluating factors such as product quality, delivery, capacity, and compliance[181]. - In 2024, the number of suppliers by region includes 288 (24.30%) from China (excluding Hong Kong and Taiwan), 3 (0.25%) from Hong Kong, and 577 (48.69%) from the Americas[178]. - The procurement amount by region shows that 30% comes from China (excluding Hong Kong and Taiwan) and 34% from Europe[183]. - The company has implemented a supplier scorecard system to identify potential risks in the supply chain, including environmental and social risks[181]. - The company has not recorded any product recalls due to safety and health reasons in the current year[185]. - The company has not received any complaints regarding product quality in 2024[188]. - The company emphasizes responsible and environmentally friendly procurement of raw materials, prioritizing suppliers that meet responsible sourcing standards[182]. - The company conducts annual supplier assessments to remove those that do not meet cooperation standards from the qualified supplier list[181]. - The company has not been involved in any legal cases related to bribery, corruption, extortion, or money laundering that significantly impact its operations this year[189]. Community Engagement - The company donated supplies worth RMB 3,073 during the Guangxi Bin Yang flood in June 2024[195]. - The company has been supporting the HERhealth project since 2019, aimed at improving health awareness among female workers in its Vietnam contract factory[195]. - The company has a commitment to support local communities and collaborate with local charities[195]. - The company focuses on protecting the rights and well-being of vulnerable women[195]. Data Protection and Security - The company requires employees to sign confidentiality agreements to protect its intellectual property and conducts regular training on the importance of IP protection[191]. - Employees are required to use designated antivirus software and undergo continuous training on information security practices[6.3]. - The company has established clear data processing policies and procedures to ensure compliance with privacy standards[6.3]. - The company collects only necessary personal data and does not use it without consent[6.3]. - The company does not directly emit waste gases or other pollutants[197]. - The company has set energy efficiency targets and is taking steps to achieve them[200].
利华控股集团(01346) - 2024 - 年度财报