Financial Performance - The Group recorded revenue of approximately HK$849.1 million for FY2022, representing an increase of approximately 17.2% compared to HK$724.6 million for FY2021[26]. - For FY2022, the Group's revenue increased by approximately 17.2% to HK$849.1 million compared to HK$724.6 million in FY2021[31]. - The net profit for FY2022 was approximately HK$8.1 million, a significant turnaround from a net loss of approximately HK$136.0 million in FY2021[28]. - The gross profit for FY2022 amounted to approximately HK$97.9 million, representing an increase of approximately 162.7% compared to HK$37.3 million in FY2021[30]. - The Toys Division recorded a segment profit before taxation of approximately HK$53.1 million in FY2022, compared to a loss of approximately HK$69.1 million in FY2021[41]. - The increase in revenue and gross profit in the Toys Division was primarily due to increased purchase orders from the largest customer based in the USA[30]. Business Strategy and Opportunities - The Toys Division resumed full operations, contributing significantly to the revenue increase[16]. - The Group plans to issue Convertible Bonds amounting to HK$22.5 million and HK$14 million to explore new business opportunities and provide working capital[19]. - The potential investment in a watermelon planting project in Japan aligns with the Group's strategy to diversify into the agricultural sector[19]. - The Group aims to explore new business opportunities with lower management costs to increase market share[24]. - The Group's strategy includes diversifying into more profitable business activities to maintain competitiveness and ensure shareholder returns[18]. - The Group's management is focused on analyzing risks and returns on investments in new sectors, leveraging the experience of its executive directors[19]. Financial Stability and Funding - Cost-cutting measures have been implemented to reduce operating costs and improve financial stability[18]. - The Group's net current liabilities at the end of FY2022 were approximately HK$192.8 million, down from HK$232.4 million in FY2021[37]. - The capital deficiencies attributable to owners of the Company decreased to approximately HK$89.6 million as of December 31, 2022, from approximately HK$98.9 million in 2021[38]. - The Group's gearing ratio as of December 31, 2022, was approximately 134%, compared to 123% in 2021[38]. - The Group believes it will have sufficient working capital for at least 12 months from December 31, 2022, due to successful measures including the issuance of two convertible bonds and negotiations for extending the maturity of outstanding borrowings[50]. - Management acknowledges the need for further equity funding to address auditor concerns regarding the going concern issue and plans to contact potential investors for raising equity funds by the end of 2023[56]. - The Audit Committee agrees with Management's position on the action plan to address the Audit Qualification and supports the Group's ability to continue as a going concern[52]. - The Group's financial resources are expected to meet its obligations in the foreseeable future, contingent on the successful completion of planned actions and obtaining alternative financing[57]. - Management intends to conduct equity fundraising activities through placing new shares and/or rights issues to secure necessary funds[56]. - The Group aims to remove the Disclaimer in the audit of the consolidated financial statements for the year ending December 31, 2023, assuming all plans are executed as intended[57]. Environmental, Social, and Governance (ESG) Management - The Board emphasizes the importance of effective ESG management to enhance corporate image and reduce risks, establishing a working group to oversee ESG matters[62]. - Regular assessments of performance indicators in resource consumption and occupational safety are conducted to ensure operational efficiency[65]. - The Group has made a basic assessment of ESG-related risks and incorporated them into its risk management and internal control systems[64]. - The ESG Report covers the period from January 1, 2022, to December 31, 2022, focusing on the primary business of toy manufacturing and trading[76]. - The Group maintains the same ESG management structure and processes as the previous reporting period, ensuring consistency in monitoring ESG issues and performance[82]. - The Group has established multiple communication channels to engage stakeholders, including meetings, reports, and surveys, to identify and prioritize material ESG aspects[88]. - The Group's commitment to sustainable development includes integrating environmental and social initiatives into its business strategy to enhance competitiveness[75]. - The ESG Report adheres to the principles of materiality, quantitative measurement, balance, and consistency as outlined in the ESG Reporting Guide[72]. Environmental Performance - Total GHG emissions decreased by 8% from 7,992 tonnes in 2021 to 7,380 tonnes in 2022[108]. - Scope 1 emissions increased by 111% from 97 tonnes in 2021 to 205 tonnes in 2022[108]. - Scope 2 emissions decreased by 9% from 7,894 tonnes in 2021 to 7,175 tonnes in 2022[108]. - GHG emissions intensity per production volume improved by 31%, from 0.39 tonnes CO2e per 1,000 pieces in 2021 to 0.27 tonnes in 2022[108]. - No environmental non-compliance incidents resulted in fines or prosecutions during the 2022 reporting period[101]. - The Group adheres to the ISO 14001 environmental management system standard to enhance environmental performance[102]. - The Group's primary source of GHG emissions is from purchased electricity, followed by fuel consumption from company vehicles[103]. - The Group has established an emission reduction pathway with a long-term perspective as a directional target[103]. - The Group has complied with all relevant national and local environmental laws and regulations[99]. - The Group's environmental management initiatives are overseen by an Environmental Management Committee[99]. - The Group targets to reduce total GHG emissions by 2-3% in the coming year through various energy efficiency initiatives[109]. - Air pollutant emissions increased significantly in 2022, with Nitrogen Oxides (NOx) rising by 180% to 595,104 grams, Sulphur Oxides (SOx) increasing by 96% to 1,205 grams, and Particulate Matter (PM) up by 182% to 58,726 grams compared to 2021[115]. - The Group aims to reduce hazardous air pollutant emissions (SOx, NOx, and PM) by 2-3% in the upcoming year[116]. - Non-hazardous waste increased by 6% to 55 tonnes in 2022, while hazardous waste rose by 5% to 60 tonnes, attributed to increased production volume[124]. - The intensity of non-hazardous waste per production volume decreased by 33% to 0.02 tonnes per 10,000 pieces in 2022[124]. - The Group has implemented a waste management principle of 3R (Reduce, Reuse, Recycle) to minimize waste generation[120]. - The Group has established a resource management procedure to regulate energy use and has adopted various energy-saving measures[128]. - The Group has replaced conventional lighting with LED and procured environmentally friendly equipment to reduce energy consumption[128]. - The Group has set a long-term target for energy consumption reduction, focusing on minimizing reliance on fossil fuels[126]. - The Group has introduced a VOCs removal system to ensure emissions are within legal requirements and connected to the Ministry of Environmental Protection for monitoring[110]. - Total electricity consumption decreased by 5% from 9,435,158 kWh in 2021 to 8,922,200 kWh in 2022[130]. - Diesel consumption surged by 234%, increasing from 14,200 litres in 2021 to 47,450 litres in 2022[130]. - The Group aims to reduce energy consumption by 2-3% in the coming year[132]. - Water consumption in Zhongshan decreased by 3% from 237,511 m³ in 2021 to 230,113 m³ in 2022[137]. - Total raw materials consumption decreased by 5% from 3,057.2 tonnes in 2021 to 2,915.2 tonnes in 2022[143]. - The intensity of electricity consumption per piece decreased by 30%, from 0.47 kWh/piece in 2021 to 0.33 kWh/piece in 2022[130]. - The intensity of diesel consumption per 100 pieces increased by 147%, from 0.76 kWh/100 pieces in 2021 to 1.88 kWh/100 pieces in 2022[130]. - The Group has established a long-term water consumption reduction pathway, although water consumption remained stable in 2022[134]. - The Group continues to implement initiatives to save water, including reminders for employees to conserve water[137]. - The Group was recognized as "Hong Kong – Guangdong Cleaner Production Excellent Partners (Manufacturing)" for its environmental efforts[146]. Employment and Training - The Group employed 1,696 full-time employees as of December 31, 2022, in Zhongshan and Hong Kong[169]. - The Group has achieved zero complaints and no pollution occurrences during the 2022 reporting period[155]. - There were no cases of non-compliance regarding employment practices during the 2022 reporting period[159]. - The Group's employment policy is regularly reviewed to ensure fair and equal recruitment practices[163]. - All employees are entitled to various statutory holidays and paid leave, including maternity and paternity leave[165]. - The Group has established contingent plans to address extreme weather conditions to ensure staff safety[153]. - The Group is committed to promoting safe and fair working conditions, certified by ICTI CARE Foundation[159]. - The Group's remuneration package is benchmarked against industry norms to maintain competitiveness[165]. - Employee turnover rate increased to 36% in the 2022 Reporting Period[178]. - Average training hours for employees were 32 hours in the 2022 Reporting Period[196]. - Percentage of employees trained was 99.41% in 2022, slightly up from 99.37% in 2021[198]. - Male employees trained accounted for 38.85% in 2022, down from 41.55% in 2021[198]. - Female employees trained accounted for 61.15% in 2022, up from 58.45% in 2021[198]. - Senior management training increased to 0.53% in 2022 from 0.29% in 2021[198]. - Middle and junior management training increased to 1.60% in 2022 from 0.97% in 2021[198]. - Supervisor training increased to 1.78% in 2022 from 1.21% in 2021[198]. - General staff training decreased to 96.09% in 2022 from 97.52% in 2021[198]. - No incidents of non-compliance with occupational health and safety regulations were reported in the 2022 Reporting Period[188]. - Average training hours per employee increased to 31.87 hours in 2022 from 24.90 hours in 2021, reflecting a growth of approximately 27.5%[200]. - Male employees completed an average of 31.75 training hours in 2022, up from 25.26 hours in 2021, representing a rise of about 25.5%[200]. - Female employees completed an average of 31.95 training hours in 2022, compared to 24.64 hours in 2021, indicating an increase of approximately 29.7%[200]. - Senior management training hours rose significantly to 9.40 hours in 2022 from 4.36 hours in 2021, marking an increase of about 115%[200]. - Middle and Junior management training hours increased to 23.70 hours in 2022 from 12.31 hours in 2021, showing a growth of approximately 92.8%[200]. - General staff training hours improved to 31.91 hours in 2022, up from 24.89 hours in 2021, reflecting an increase of around 28.2%[200]. - Supervisor training hours remained constant at 48.00 hours in both 2022 and 2021, indicating stability in this category[200].
瀛晟科学(00209) - 2022 - 年度财报