Financial Performance - The total revenue for the fiscal year ended December 31, 2021, was approximately HKD 235 million, a decrease of about 7.7% compared to HKD 255 million in the previous year[13]. - The company recorded a loss of approximately HKD 80.3 million for the fiscal year, an increase of 97.8% from a loss of HKD 40.6 million in the previous year[13]. - The increase in loss was primarily attributed to the cessation of government subsidies under the COVID-19 employment support scheme, a one-time loss from the sale of an associate company, and a decline in revenue and gross margin in the trading business in mainland China[13]. - Operating costs for the frozen warehouse and logistics business have significantly impacted the company's operating profit margin due to increased rental costs and additional expenses for health and safety measures[18]. - The company reported a basic and diluted loss per share of HK$ (27.7) for the year ended December 31, 2021, compared to HK$ (16.2) in 2020[40]. - The company's current ratio improved to 1.25 in 2021 from 0.83 in 2020, indicating better short-term financial health[40]. - The total liabilities to total assets ratio increased to 0.96 in 2021 from 0.80 in 2020, reflecting a higher level of debt[40]. - The company has a bank balance and cash of approximately HK$ 59.9 million as of December 31, 2021, down from HK$ 69.8 million in 2020[41]. - The company has extended the maturity of bonds totaling HK$ 90 million for two years, indicating ongoing financial restructuring efforts[42]. - The company’s retained earnings included paid-in surplus of HKD 84,239,000 and accumulated losses of HKD 528,250,000 as of December 31, 2021[76]. Business Operations and Strategy - The company faced challenges in the frozen warehouse and logistics business due to reduced demand from the food and beverage sector, impacted by strict government regulations on dining[9]. - The company diversified its customer base to attract new clients needing storage and logistics services during the crisis, including supermarkets and frozen food stores[8]. - The company optimized warehouse operations to improve efficiency and reduce losses, addressing rising operational costs due to enhanced food safety measures[9]. - The company plans to continue enhancing the operational efficiency of its frozen warehouse facilities and effectively manage costs to increase returns[10]. - The company has restructured its internal operations and adjusted its product mix to focus on high-margin retail products in mainland China[9]. - The company has expanded its temperature-controlled warehouse area in Kwai Shing Street to meet the growing demand for storage and logistics services during the pandemic, with operations starting in Q3 2021[16]. - The company signed a service agreement for an additional frozen warehouse facility in Tsing Yi in Q4 2021 to address increasing customer storage needs[16]. - The company has implemented strict cost control measures to maintain profitability in its food and beverage trading segment, terminating several low-margin wholesale channels[20]. - A new B2C business segment and a beverage product named "Attitude Planet" were launched in April 2021, targeting the younger generation through online and offline distribution channels[20]. - The company has introduced an online grocery shopping platform "Urban Mart" in Hong Kong, aimed at reaching retail customers with a variety of daily products[21]. - The company has ceased providing new financial resources to its non-core loan business, reallocating resources to more profitable segments[22]. - The company anticipates gradual recovery in its frozen warehouse and logistics business in Hong Kong and food and beverage distribution business in mainland China as the global economy improves[30]. - The company plans to continue diversifying its customer base by engaging more supermarkets and frozen food retailers to meet the strong demand for refrigerated facilities during the pandemic[31]. Risk Management and Governance - The company recognizes ongoing risks from the pandemic, geopolitical tensions, and changing monetary policies, which may affect demand for its products and services[29]. - The company has established a risk management policy to enhance its risk management capabilities[126]. - The board is responsible for maintaining an effective risk management and internal control system, which is reviewed semi-annually by the audit committee[186]. - The audit committee reviewed the risk management and internal control review report and the audited consolidated financial statements for the fiscal year ending December 31, 2021[176]. - The company has adopted a whistleblowing policy since March 28, 2012, to encourage employees to report any misconduct or potential violations, with no reports received during the review year[187]. - The company has implemented a series of internal control measures, including enhanced reporting channels for senior management, to improve risk management and internal control systems[187]. - The company has a comprehensive communication policy to ensure transparency and compliance with regulatory requirements, including adherence to guidelines issued by the Securities and Futures Commission[188]. Corporate Governance - The board of directors emphasizes the importance of corporate governance for the company's success and long-term shareholder benefits[126]. - The board consists of three committees: Audit Committee, Nomination Committee, and Remuneration Committee, which assist in monitoring senior management functions[127]. - The company has adopted the corporate governance code as per the Stock Exchange Listing Rules, ensuring compliance with all relevant provisions[126]. - The company has confirmed the independence of all current independent non-executive directors[105]. - The nomination committee, established in June 2005, includes three independent non-executive directors and is responsible for recommending all director appointments and reappointments[147]. - The company has not appointed a chairman as of December 31, 2021, which has resulted in non-compliance with corporate governance code A.2.7[143]. - The company’s board members have participated in continuous professional development through seminars and relevant reading materials[139]. - The remuneration committee provides recommendations on director remuneration based on the company's operating performance and market statistics[120]. - The audit committee was established on January 12, 2000, in accordance with guidelines from the Hong Kong Institute of Certified Public Accountants[171]. - The external auditor, Deloitte Touche Tohmatsu, was recommended for reappointment by the audit committee for the fiscal year ending December 31, 2021[176]. Shareholder Information - The company did not recommend any dividend for the year ending December 31, 2021, consistent with the previous year[74]. - The company’s dividend policy was adopted by the board and became effective on January 1, 2019[199]. - The dividend policy aims to balance shareholder interests and prudent capital management[199]. - Any proposed final dividend must be approved by shareholders at the annual general meeting and cannot exceed the amount recommended by the board[199]. - The board may also consider declaring special dividends outside of interim or final dividends[200]. - The company will periodically review and reassess the effectiveness of the dividend policy[200]. - Any amendments to the dividend policy must be considered and approved by the board[200].
大同集团(00544) - 2021 - 年度财报