Financial Performance - For FY2021, the Group's consolidated turnover increased to HK$1,433,612,000, representing an increase of 11.17% compared to the previous year[10]. - The Group's net profit for FY2021 was HK$41,960,000, a decrease of 33.63% from HK$63,218,000 in FY2020, with basic earnings per share of 8.41 Hong Kong cents[10][15]. - Cash generated from operations in FY2021 was HK$19,088,000, with net cash and cash equivalents at the end of FY2021 amounting to HK$244,802,000[10]. - The proposed final dividend is 4 Hong Kong cents per ordinary share for the year ended December 31, 2021, consistent with the previous year[24]. - An interim dividend of 2 Hong Kong cents per ordinary share was paid for the year ended 31 December 2021, with a proposed final dividend of 4 Hong Kong cents per ordinary share[108]. Research and Development - The Group invested HK$32,187,000 in R&D projects in FY2021, compared to HK$15,507,000 in FY2020, to enhance operational capabilities and support new product development[14]. - The Group's management anticipates that R&D innovations will help enter new market segments, diversify risks, and improve profit margins[14]. - The increase in capital expenditure is partly related to new R&D projects to meet the minimum annual investment requirement for High Technology ventures[14]. - The Group plans to allocate more resources in 2022 to enhance cybersecurity and aims for ISO27001 certification of its IT system[49]. Operational Efficiency - The Group is focusing on AIoT compatibility by investing in information systems and automated production processes to become 5G ready[14]. - The Group's positive operating cash flow enables continued dividend payments to shareholders despite the decrease in net profit[10]. - The Group's current ratio improved to 2.76 as of December 31, 2021, compared to 2.62 in the previous year[20]. - Trade receivables turnover decreased to 77 days in FY2021 from 83 days in FY2020, while inventory turnover increased to 64 days from 59 days[21]. - Bank balances and cash decreased by HK$47,092,000 to HK$244,802,000 as of December 31, 2021, primarily due to higher inventory levels and increased capital and R&D expenditures[21]. Corporate Governance - The Board has appointed new independent non-executive directors to improve diversity and corporate governance[56]. - The company has received annual confirmations of independence from all independent non-executive directors, affirming their independence[128]. - The board of directors includes a mix of executive, non-executive, and independent non-executive members, ensuring diverse governance[128]. Market and Strategic Positioning - The Group successfully opened new revenue streams from higher value-added products, particularly in the beverage category, despite global trade uncertainties[44]. - The Group anticipates revenue growth from the beverage category in 2022, leveraging new technologies for innovative products[44]. - The management aims to leverage digital transformation tools to quickly adapt strategies in competitive global markets[14]. - The management is focused on building stronger partnerships with strategic customers and suppliers to navigate market downturns[49]. Employee Relations - The Company maintains good relationships with employees, ensuring reasonable remuneration and benefits[98]. - The Group's approach to digital transformation requires significant upskilling and reskilling of existing employees[49]. Shareholder Information - The total number of issued shares of the Company as of December 31, 2021, is 501,199,860 ordinary shares[7]. - Major shareholders included Ms. Sun Kwing Hai Amelia with a total shareholding of 107,348,981 shares, representing 21.42% of the total issued shares[169]. - The largest customer accounted for 26.70% of the Group's total revenue from sales of goods, while the five largest customers in aggregate accounted for 86.78%[105]. - The largest supplier accounted for 9.17% of the Group's total purchases, and the five largest suppliers in aggregate accounted for 26.85%[105]. Risk Management - The Group does not foresee substantial exposure to foreign currency fluctuations and has not considered using financial instruments for hedging[35]. - The Group has purchased new backup electricity generators to mitigate production shutdown risks due to limited power supply experienced in August and September 2021[43]. - The Company has purchased suitable insurances for the Directors concerning possible legal proceedings[186]. Future Outlook - The Group's management emphasizes the importance of long-term strategies over short-term metrics to optimize performance during uncertain times[55]. - Further discussion on the Group's future prospects and principal risks can be found in the Chairman's Statement and Management Discussion and Analysis[87].
利民实业(00229) - 2021 - 年度财报