Financial Performance - The company's consolidated revenue for the fiscal year ended December 31, 2024, decreased by 36.1% to approximately HKD 456.86 million from HKD 714.49 million in 2023[20]. - The gross profit fell by 50.6% to HKD 152.37 million, resulting in a gross margin of 33.4%, down from 43.2% in the previous year[13]. - The loss attributable to the company's owners increased by 191.0% to HKD 298.57 million compared to a loss of HKD 102.60 million in 2023[20]. - Basic loss per share was HKD 39.5 cents, a 190.4% increase from HKD 13.6 cents in the prior year[13]. - The mid-term dividend paid was HKD 1.5 cents, a decrease of 70% from HKD 5.0 cents in the previous year[13]. - The company recorded a consolidated revenue of approximately HKD 456,859,000 for the year 2024, a decrease of about HKD 257,627,000 or 36.1% compared to HKD 714,486,000 in 2023[24]. - The loss attributable to the company's owners was approximately HKD 298,573,000, an increase of 191.0% from last year's loss of HKD 102,604,000, primarily due to the decline in revenue[24]. - Gross profit decreased by approximately 50.6% to about HKD 152,366,000 due to reduced sales[28]. - Distribution and selling costs decreased by approximately 6.7% to about HKD 181,074,000, mainly due to a reduction in royalty fees[29]. - Administrative expenses increased by 2.5% to HKD 160,096,000, which includes salaries, rent, and depreciation[30]. - Financial expenses increased by approximately 17.7% to about HKD 4,473,000 due to higher interest on bank loans and lease liabilities[31]. - As of December 31, 2024, the total assets of the group were approximately HKD 694,161,000, a decrease of about 32.6% from HKD 1,031,356,000 in 2023[40]. - The capital debt ratio rose to 16.3%, up from 5.8% in 2023, indicating a significant increase in leverage[13]. Strategic Focus and Operations - The company plans to focus on improving operational efficiency and optimizing organizational structure to maintain market position amid economic uncertainties[21]. - The company aims to enhance product innovation and marketing strategies to adapt to rapidly changing market conditions[21]. - The company has strategically expanded its development in Vietnam's real estate market through land acquisition in Da Nang[47]. - The group plans to engage in property development in Vietnam in 2024, considering various local conditions and strategic priorities[48]. - The company will continue to enhance automation in manufacturing to improve efficiency and maximize long-term returns for shareholders[54]. - The group is implementing flexible strategies to expand its product range and strengthen its customer base amid global economic uncertainties[53]. - The company has reduced capital investments in related development projects due to delays in land acquisition and a decline in core manufacturing operations[56]. Environmental, Social, and Governance (ESG) - The company emphasizes the importance of environmental, social, and governance (ESG) matters for sustainable development, integrating these principles into its mission[21]. - The group is focused on environmental responsibility by implementing green office measures and considering further eco-friendly practices in its operations[50]. - The company aims to minimize its environmental impact through resource management and efficiency measures[121]. - The total greenhouse gas emissions for the business in 2024 amounted to 12,160.93 tons of CO2 equivalent, a decrease from 12,421.81 tons in 2023[127]. - The annual emission density in 2024 was 0.0991 tons of CO2 equivalent per square meter, down from 0.1012 tons in 2023[130]. - The company implemented energy efficiency measures that resulted in a reduction of 17.760 tons of CO2 equivalent emissions in 2024, compared to 39.970 tons in 2023[131]. - The group has obtained certifications for social compliance standards, promoting safety and fair labor practices[121]. - The group has implemented various environmental protection measures to minimize greenhouse gas emissions, although climate change risks currently do not significantly impact business operations[140]. - The group actively promotes water-saving measures, including the installation of water meters and automatic valves to prevent wastage[138]. - The group has not reported any significant environmental incidents during the reporting period, indicating effective management of potential pollution risks[139]. Corporate Governance - The board consists of four executive directors and four independent non-executive directors, ensuring at least one-third of the board is independent[67]. - The company has adopted a corporate governance code in compliance with the Hong Kong Stock Exchange listing rules, reflecting its commitment to best practices[65]. - The independent non-executive directors have confirmed their independence according to the relevant listing rules, ensuring effective independent judgment[68]. - The company has a strong focus on risk management, identifying key risks and implementing appropriate measures and monitoring systems[66]. - The board is responsible for strategic development decisions and monitoring the management of the group's business and affairs[66]. - The company has established various committees, including audit, remuneration, and nomination committees, to assist the board in fulfilling its responsibilities[66]. - The independent non-executive directors possess appropriate professional qualifications and expertise in accounting and financial management[67]. - The company has a policy for directors to retire and seek re-election at least once every three years, promoting accountability[68]. - The board is committed to continuous review and enhancement of governance policies to align with regulatory changes and best practices[65]. - The company has a diverse board with members having extensive experience in finance, asset management, and corporate governance[69]. - The company held 32 board meetings during the year, with all directors receiving sufficient information to make informed decisions[71]. - The remuneration policy for executive directors and senior management is linked to performance, service tenure, and experience, with regular reviews based on market practices[76]. - The Nomination Committee is responsible for reviewing the board's structure and composition annually to ensure diversity in age, expertise, skills, experience, independence, knowledge, and gender[79]. - All directors participated in continuous professional development to stay updated on their responsibilities and the latest developments in laws and regulations applicable to the company[73]. - The company has adopted a code governing securities trading by directors, ensuring compliance with the required standards[72]. - The Remuneration Committee's primary role is to review the remuneration policies and structures for directors and senior management, ensuring the ability to attract and retain a high-quality team[74]. - The company’s chairman and CEO roles are held by different individuals, ensuring effective governance and operational management[70]. - The Nomination Committee evaluates the independence of independent non-executive directors and makes recommendations for appointments and reappointments[78]. - All members of the Remuneration Committee attended all meetings during the year, ensuring active participation in decision-making[75]. - The company provides directors with access to independent professional advice when necessary, with costs covered by the company[71]. - The board consists of six male directors and two female directors, meeting the minimum requirement set by rule 13.92[86]. - The company aims to maintain at least one female director over the next four years to enhance board diversity[86]. - The nomination committee will annually review measurable diversity goals and report progress to the board[85]. - The audit committee is responsible for reviewing the appointment of external auditors and ensuring their independence[89]. - The audit committee members include qualified accountants, ensuring compliance with accounting standards and regulations[90]. - The audit committee has conducted mid-year and year-end financial reviews, ensuring adherence to accounting policies and legal requirements[93]. - The company emphasizes transparency and fairness in the nomination process for board members[84]. - The nomination committee will focus on attracting diverse talent across various backgrounds to foster a more inclusive environment[85]. - The financial statements for the year ending December 31, 2024, have been reviewed by the audit committee and audited by external auditor KPMG (Hong Kong) with no significant uncertainties affecting the company's ability to continue as a going concern[94]. - The company paid approximately HKD 1,800,000 for statutory audit services provided by KPMG (Hong Kong) and around HKD 1,821,000 for audit and non-audit services to overseas subsidiaries[105]. - The internal audit function has been established since 2015, focusing on risk management and internal controls, with a dedicated internal audit team consisting of two members[102]. - The audit committee has conducted a review of the effectiveness of the internal control system, finding it to be effective and sufficient without any significant concerns affecting the company's financial status or operational performance[104]. - The company has implemented appropriate monitoring procedures to safeguard assets and ensure compliance with relevant regulations and accounting standards[100]. - The audit committee received reports on the performance of the internal audit function and identified key risks, ensuring that appropriate follow-up actions were taken[99]. - The board is responsible for maintaining proper accounting records and ensuring timely preparation of financial statements[96]. - The company actively enhances transparency and communication with shareholders and potential investors through mandatory interim and annual reports[109]. - The audit committee has established a whistleblowing policy to allow employees and stakeholders to report any misconduct, ensuring prompt and transparent investigations[103]. - The company has adopted various policies to assess and improve the effectiveness of its internal control and risk management functions[104]. - The company conducted a review of its shareholder communication policy, ensuring effective implementation during the review year[110]. - The annual general meeting provided a platform for shareholders to engage with the board, with all directors present except for two[112]. - The company expects to consider multiple factors when declaring dividends, including financial performance and capital needs[117]. Employee Relations and Workforce - The company operates four factories in Vietnam and employs approximately 2,200 staff across various regions including Hong Kong, China, and the US[7]. - As of December 31, 2024, the group has approximately 2,200 employees, a decrease from 2,310 in 2023, and offers competitive compensation aligned with market trends[49]. - The total number of employees as of December 31, 2024, was approximately 2,200, with 2,081 being factory employees, all of whom are full-time[141]. - The annual turnover rate for employees aged 18-25 was 21.2%, slightly up from 21.12% in the previous year, while the turnover rate for those aged 46-55 decreased from 21.19% to 12.50%[143]. - The total training hours for factory employees increased to 8 hours per employee in 2024, compared to 4 hours per employee in 2023[150]. - The number of work-related injuries resulting in lost workdays was 1 in 2024, down from 2 in 2023, with a total of 23 lost workdays compared to 45 in the previous year[147]. - The group has implemented strict measures to prevent child and forced labor in compliance with labor laws[154]. - The group maintains good relationships with suppliers to ensure stable services and product quality[155]. - There were no significant complaints regarding product quality and delivery during the reporting period[157]. - The group has approximately 500 suppliers across Hong Kong, China, and Vietnam[154]. Innovation and Product Development - The group is committed to providing innovative and quality products, investing significant resources in new equipment to enhance competitiveness[159]. - The group will continue to purchase energy-efficient appliances and materials, and review supplier sources[164]. - The group encourages reporting of any misconduct or fraud, ensuring confidentiality for whistleblowers[162]. - The top five customers accounted for approximately 59.0% of the group's revenue, with the largest customer representing about 32.8%[170]. - The total cash dividends paid during the year amounted to approximately HKD 34,029,000, with a proposed final dividend of HKD 0.01 per share, totaling around HKD 7,562,000[171]. - The company's distributable reserves as of December 31, 2024, were approximately HKD 186,137,000, a decrease from HKD 400,779,000 in 2023[175]. - The total remuneration for the eight directors amounted to HKD 10,812,000, with the highest individual remuneration being HKD 4,035,000[183]. - As of December 31, 2024, the company had issued shares totaling 538,573,569, with the largest shareholder holding 71.22% of the issued share capital[191]. - The company did not purchase, redeem, or sell any of its listed shares during the year[174]. - The board of directors has the discretion to recommend dividends based on various factors, including corporate governance considerations[172]. - There were no warrants or stock-linked agreements issued during the year[176]. - The company has no provisions regarding preemptive rights in its articles of association[177]. - The company has not entered into any management contracts related to its overall business during the year[178]. - Smart Forest holds 71.22% of the company's issued ordinary shares, totaling 538,573,569 shares[193]. - The company has received revised financing letters from banks for a total amount not exceeding HKD 70,000,000, effective from September 18, 2020[197]. - The company confirms that at least 25% of its issued shares are held by the public prior to the publication of the annual report[196]. - The company has established a remuneration committee to review the remuneration policy based on group performance and market statistics[194]. - The company appointed KPMG as the new auditor on October 24, 2024, following the resignation of another firm[199]. - The company has not changed its external auditor in the past three years, with KPMG auditing the financial statements for the fiscal year 2024[199]. - The company has disclosed that its controlling shareholder must maintain at least 51% ownership to avoid default on revised financing terms[197]. - The board has adopted corporate governance codes and has complied with them, except for a specific disclosure regarding independent non-executive directors' tenure[195]. - The company has not made any arrangements for its directors or their associates to benefit from the purchase of shares or debentures[192]. - The company has confirmed that there are no other known interests or short positions in its issued share capital as of December 31, 2024[193].
MATRIX HOLDINGS(01005) - 2024 - 年度财报