Corporate Governance - The board consists of ten members, including four executive directors, two non-executive directors, and four independent non-executive directors, ensuring balanced discussions with independent viewpoints [16]. - The company is committed to high levels of corporate governance to protect shareholder interests and enhance corporate value through effective board practices and transparency [15]. - The company will review measurable targets related to gender, race, age, and tenure to ensure ongoing effectiveness in board member diversity policies [17]. - The company emphasizes the importance of continuous professional development for all directors, providing updates on legal and regulatory changes [18]. - The board of directors held a total of 4 meetings during the year, with all executive directors attending all meetings [31]. - The remuneration committee held one meeting during the year, reflecting the company's governance practices [28]. - The nomination committee reviewed and recommended the re-election of directors for the upcoming annual general meeting scheduled for June 1, 2023 [39]. - The company has received annual independence confirmation from its independent non-executive directors, affirming their independent status [146]. - The company has not identified any significant deficiencies in internal controls during the audit process [143]. - The company’s board of directors is responsible for preparing true and fair consolidated financial statements in accordance with applicable financial reporting standards [164]. Financial Performance - The company's revenue for the year 2022 was HKD 2,401,849,000, a decrease of 15.3% compared to HKD 2,836,098,000 in 2021 [170]. - The gross profit for 2022 was HKD 10,470,000, significantly down from HKD 223,019,000 in 2021, indicating a sharp decline in profitability [170]. - The net loss for the year was HKD 137,019,000, compared to a loss of HKD 19,074,000 in the previous year, reflecting a worsening financial position [172]. - The company reported a pre-tax loss of HKD 157,343,000, which is a substantial increase from the pre-tax loss of HKD 18,105,000 in 2021 [170]. - The total comprehensive loss for the year amounted to HKD 242,229,000, contrasting with a comprehensive income of HKD 23,736,000 in 2021 [172]. - The company's equity attributable to owners of the parent decreased to HKD 1,120,120,000 from HKD 1,426,991,000 in the previous year, indicating a decline in shareholder value [175]. - The basic and diluted loss per share for 2022 was HKD 14.11, compared to HKD 2.09 in 2021, highlighting a significant deterioration in earnings per share [170]. - The company experienced a foreign exchange loss of HKD 105,210,000 from overseas operations, compared to a gain of HKD 42,810,000 in 2021 [172]. - The company reported a significant increase in other income and gains, which rose to HKD 137,295,000 from HKD 65,850,000 in the previous year, indicating potential growth in ancillary revenue streams [170]. Risk Management - The company is committed to improving internal controls and risk management effectiveness [23]. - The company emphasizes the importance of a robust risk management and internal control system to achieve long-term sustainable growth [32]. Shareholder Information - The company proposed a final dividend of HKD 0.03 per share, totaling approximately HKD 30,430,000, subject to shareholder approval at the upcoming annual general meeting [58]. - The company has suspended shareholder registration from May 25, 2023, to June 1, 2023, to determine eligible shareholders for the annual general meeting [82]. - The company has at least 25% of its total issued share capital held by the public as of the report date [93]. - The company’s independent auditor, Ernst & Young, will be proposed for reappointment at the upcoming annual general meeting [94]. - The company’s management has assessed the recoverable amounts of underperforming restaurants and stores, leading to impairment evaluations [68]. - The company’s board of directors and management attended the annual general meeting to communicate with shareholders [73]. Operational Focus - The company aims to maintain its position as a leading Chinese restaurant group in Hong Kong by focusing on "three excellence" standards: quality products, quality service, and quality environment [6]. - The company plans to continue consolidating its business foundation and driving sales while controlling costs to create long-term value for shareholders [6]. - The company is focused on leveraging post-pandemic market recovery opportunities to enhance its business operations [6]. - The company has a diversified brand portfolio to meet the needs of different customer groups [6]. - The company maintained good relationships with suppliers, customers, and stakeholders, with no significant disputes reported during the year [57]. Audit and Compliance - The company’s financial statements for the year ending December 31, 2022, were prepared in accordance with relevant laws and listing rules, ensuring a true and fair view of the group's financial position [31]. - The external auditor, Ernst & Young, was paid a total of HKD 3,544,000 for audit and non-audit services during the year [46]. - The Group's financial statements were audited in accordance with Hong Kong auditing standards, ensuring a high level of assurance [127]. - The company reported compliance with applicable laws and regulations, with no significant violations during the year [79]. - The company has disclosed relevant impairment assessments in the financial statements notes 2.4, 3, 13, and 14 [100]. Asset Management - Total non-current assets decreased to HKD 1,690,186 thousand in 2022 from HKD 1,912,389 thousand in 2021, representing a decline of approximately 11.6% [199]. - Current assets decreased to HKD 582,792 thousand in 2022 from HKD 838,400 thousand in 2021, reflecting a decrease of about 30.5% [199]. - Cash and cash equivalents significantly dropped to HKD 251,854 thousand in 2022 from HKD 457,925 thousand in 2021, a decrease of approximately 45% [199]. - Total current liabilities decreased slightly to HKD 661,061 thousand in 2022 from HKD 732,280 thousand in 2021, a reduction of about 9.7% [199]. - The net current (liabilities)/assets position shifted to (HKD 78,269 thousand) in 2022 from HKD 106,120 thousand in 2021, indicating a negative change [199]. - Total assets less current liabilities decreased to HKD 1,611,917 thousand in 2022 from HKD 2,018,509 thousand in 2021, a decline of approximately 20.1% [199]. - Inventory decreased to HKD 126,358 thousand in 2022 from HKD 151,450 thousand in 2021, representing a decrease of about 16.6% [199]. - Trade receivables decreased to HKD 46,640 thousand in 2022 from HKD 57,437 thousand in 2021, a decline of approximately 18.9% [199]. - The company reported a decrease in lease liabilities to HKD 190,438 thousand in 2022 from HKD 200,870 thousand in 2021, a reduction of about 5.2% [199]. - Deferred tax assets increased to HKD 141,441 thousand in 2022 from HKD 123,166 thousand in 2021, an increase of approximately 14.8% [199]. Related Party Transactions - The company’s executive director, Mr. Zhong Zhenfeng, holds a 35.15% stake in Dongguan Tianyao Property Management Co., Ltd., which is considered a related party [91]. - The company has entered into a main lease agreement with Dongguan Tianyao for a two-year term from June 6, 2022, to June 5, 2024 [91]. - Legal fees paid to a related party amounted to HKD 669,000 in 2022, compared to HKD 674,000 in 2021 [114]. - Lease payments made to a related party totaled HKD 6,716,000 in 2022 [114]. Share Options - The company granted 20,130,000 stock options to eligible directors, senior management, and employees under the stock option plan, with no options exercised during the review year [62]. - The stock option plan expired on June 8, 2017, but options granted prior remain valid until fully exercised or expired [89]. - The total number of unexercised share options as of December 31, 2022, is 7,270,000 for one executive director and 7,970,000 for another [154]. - The company has a total of 400,000 unexercised share options for one executive director as of December 31, 2022 [154]. - No options were granted under the 2017 Share Option Scheme as of the report date [115].
稻香控股(00573) - 2022 - 年度财报