Financial Performance - The Group recorded a loss of approximately HK$1,074 million for the year, with a loss attributable to the owners of the Company of approximately HK$1,064 million, representing an increase of 136% compared to the previous financial year[12]. - Revenue for the year amounted to approximately HK$370 million, reflecting a 62% increase from approximately HK$229 million in the previous year, primarily driven by the calcium carbide segment[12][29]. - The increase in loss was primarily due to provisions for impairment of property, plant, and equipment, and right-of-use assets[12][17]. - The Group recorded a loss attributable to owners of approximately HK$1,064 million, representing an increase of 136% compared to HK$450 million in the previous financial year[33]. - The calcium carbide segment achieved a revenue of approximately HK$199 million, a significant increase of approximately 765% compared to HK$23 million in the previous financial year[37]. - The heat and power division reported a revenue of approximately HK$171 million, a decrease of approximately 14% compared to HK$198 million in the previous financial year[36]. - The heat and power division incurred a segment loss of approximately HK$819 million, an increase of approximately 1,022% compared to HK$73 million in the previous financial year[36]. - The Group's administrative expenses for the Year were approximately HK$126 million, representing an increase of approximately 19% compared to HK$106 million in the previous financial year[34]. - Other operating expenses decreased to approximately HK$65 million, a reduction of approximately 43% compared to HK$114 million in the previous financial year[32]. Operational Changes - The calcium carbide production division is on a recovery trend, with expectations of profitability as production volume increases[13]. - The management plans to deliver the operation of the heat and power division to the municipal government due to escalating coal prices causing significant operating losses[14]. - The construction services division was disposed of during the year to alleviate the Group's burden, influenced by COVID-19 and travel restrictions[15]. - Management is exploring the resumption of lower stream operations and the production lines for polyvinyl-chloride and vinyl acetate to improve profit margins[22][25]. - The Group has ceased operations in the heat and power segment due to escalating coal prices and is in discussions with the local government regarding the operation of Mudanjiang BD Power[45]. Financial Position - As of June 30, 2022, the Group's total assets were approximately HK$1,238 million, down from approximately HK$2,071 million in 2021[51]. - The Group's current liabilities were approximately HK$1,117 million, a decrease from approximately HK$1,284 million in 2021[51]. - The current ratio was approximately 0.1, down from approximately 0.3 in 2021, indicating a decline in liquidity[52]. - The gearing ratio increased to approximately 167% from approximately 96% in 2021, primarily due to asset impairment[52]. - Bank loans decreased to approximately HK$22 million from approximately HK$59 million in 2021, with HK$9 million due within 12 months[58]. - The total amount of bonds payable was approximately HK$1,066 million, slightly down from approximately HK$1,086 million in 2021[59]. - The rights issue completed on January 6, 2022, raised approximately HK$101.13 million, with HK$94.1 million used for debt repayment[60]. - The Group recorded a fair value gain on financial assets at fair value through profit or loss of approximately HK$2 million, compared to a loss of approximately HK$4 million in 2021[68]. - As of June 30, 2022, the Group's bank loans and other loans were secured by charges over certain property and equipment, totaling approximately HK$142 million[69]. - The Group's shareholders' equity showed a deficit of approximately HK$873 million, compared to a surplus of approximately HK$30 million in 2021[51]. Corporate Governance - The Group is committed to high standards of corporate governance to safeguard shareholder interests and enhance corporate value[98]. - The Board of Directors consists of seven members, including Ms. Chan Yuk Foebe as both Chairman and Chief Executive Officer, which deviates from the Corporate Governance Code[100]. - The independent non-executive Directors confirmed compliance with independence guidelines throughout the year, with three having the necessary professional qualifications in accounting and financial management[113]. - Appropriate liability insurance for Directors has been arranged to indemnify their liabilities arising from corporate activities, reviewed annually[114]. - Directors participated in training and briefings to develop their knowledge and skills regarding corporate governance practices and regulatory requirements[115]. - The Group's corporate governance practices complied with the Corporate Governance Code, except for the separation of the roles of Chairman and Chief Executive Officer[99]. - The Board held a total of 10 meetings during the year, with attendance rates for executive directors ranging from 0% to 100%[123]. - The Audit Committee met twice with the external auditor during the Year to discuss the scope of work, timetable, and auditors' fee[165]. - The Company has established three Board committees: the Remuneration Committee, the Audit Committee, and the Nomination Committee, each with defined written terms of reference[155]. - The Audit Committee confirmed the external auditors' independence and objectivity, evaluating the effectiveness of the internal control systems[165]. Human Resources - As of June 30, 2022, the Group had 496 full-time employees in the PRC and Hong Kong, emphasizing the importance of human resources for its success[94]. - The Group maintained competitive remuneration levels with discretionary bonuses based on merit, in line with industry practices[94]. - The remuneration band for senior management shows 8 individuals earning between HK$0 to HK$1,000,000[174]. - The Remuneration Committee met four times during the year to assess the performance of executive Directors[175]. Risk Management - The company plans to utilize hedging instruments to mitigate exchange rate risks as appropriate in response to currency market instability[81]. - The directors believe there is no significant exposure to foreign exchange fluctuations despite the devaluation of RMB during the year, with sufficient cash resources in Hong Kong dollars for repayment of borrowings[80]. - The Audit Committee reviewed the adequacy and quality of accounting and financial reporting staff, as well as risk management and internal control systems[165].
中国天化工(00362) - 2022 - 年度财报