Financial Performance - For the year ended December 31, 2021, the company's revenue was approximately HKD 810.6 million, a significant decrease from HKD 6,572.3 million in 2020[11] - The profit attributable to the company's owners for the year was approximately HKD 6.2 million, compared to a loss of HKD 93 million in 2020[11] - The total assets of the company as of December 31, 2021, were HKD 1,628.5 million, down from HKD 1,747.9 million in 2020[9] - The total liabilities decreased to HKD 189.6 million in 2021 from HKD 326.3 million in 2020[9] - The company's trading revenue for the year was approximately HKD 772.1 million, a significant decrease from HKD 6.48 billion in the previous year[26] - The overall gross profit of the group decreased to approximately HKD 38,400,000 in 2021, down from HKD 424,000,000 in 2020, primarily due to adverse economic conditions and a cautious trading approach[35] - Rental income for the year was approximately HKD 12.6 million, down from HKD 49.1 million in the previous year[32] - The group generated rental income of approximately HKD 1,600,000 from investment properties, with a total rental income of about HKD 300,000 from short-term leasing earlier in the year[38] Trading and Market Conditions - The company chose not to engage in crude oil trading in 2021 due to limited market opportunities, focusing instead on petrochemical products and coal trading[12] - The company faced challenges in commodity trading due to weak demand for refined oil and petrochemical products in China, leading to a decline in overall revenue[12] - The manufacturing purchasing managers' index in China fell to 49.2 in September 2021, indicating a contraction in the manufacturing sector, which impacted the company's trading activities[12] - The company continues to strengthen its domestic trading network for petrochemical products and refined oil despite weak demand in China[13] - Revenue from petrochemical product trading accounted for about 58% of total trading revenue, up from 11% in the previous year[26] - Coal trading revenue increased to 27% of total trading revenue, compared to 3% in the previous year[26] Investments and Subsidiaries - The storage income and net profit of Nantong Runde, a wholly-owned subsidiary, increased compared to 2020, indicating a stable income source for the company[14] - The company expects to benefit from investments in oil and gas assets through the SH Energy fund, which generated positive cash flow in 2021[14] - The petrochemical subsidiary, Fujian Xiangjiang, is expected to start operations at its production facility in the first quarter of 2023, delayed due to COVID-19[17] - The SEBS project, a key local project, aims for an annual production capacity of 50,000 tons and is expected to generate stable revenue in the future[17] - The company acquired all shares of Changhe Property Investment Limited for HKD 78 million, but recognized impairment losses on investment properties due to unfavorable economic conditions in Hong Kong[16] Debt and Financial Obligations - The total amount owed by Shandong Yuhuang Shengshi Chemical Co., Ltd. was approximately USD 62,500,000, equivalent to about HKD 487,500,000, with an outstanding balance of approximately USD 31,200,000 (HKD 243,400,000)[44] - The total amount owed by Shandong Shengxing Chemical Co., Ltd. was approximately USD 91,500,000, equivalent to about HKD 713,700,000, with an outstanding balance of approximately USD 83,000,000 (HKD 647,400,000)[48] - Shandong Shengxing has an outstanding debt of approximately $17,400,000 (equivalent to about HKD 135,700,000) as of December 31, 2021, with partial payments of about $15,800,000 (equivalent to about HKD 123,200,000) received[49] - The group had no bank borrowings as of December 31, 2021, a decrease from HKD 20,200,000 in 2020, resulting in a debt-to-asset ratio of 0% compared to approximately 8% in 2020[39] Corporate Governance - The company has adopted and fully complied with the corporate governance code as per the Hong Kong Stock Exchange listing rules, with some exceptions noted[71] - The board is committed to high standards of corporate governance, aiming to enhance shareholder value and protect stakeholder interests[71] - The company has a strong management team with extensive experience in the oil and petrochemical industry, including over 30 years of experience in trading and business development[68][69] - The board includes members with significant academic and professional qualifications, enhancing the company's governance and strategic decision-making capabilities[66][67] - The company has a clear structure for its committees, including audit and remuneration committees, to ensure effective oversight and accountability[66][67] - The company has implemented a board diversity policy, considering factors such as gender, age, and professional experience in board composition[76] - The board has established a practice to handle significant transactions involving conflicts of interest at formal meetings[82] - The company has arranged appropriate insurance for directors to assist them in fulfilling their duties[73] Risk Management and Compliance - The company has implemented a robust internal control system to safeguard shareholder investments and the group's assets, with the board responsible for maintaining its effectiveness[143] - The board has established a formal risk management policy to regularly identify, assess, and manage risks faced by the group[145] - The company has a compliance framework in place to ensure adherence to relevant laws and regulations, enhancing overall governance[145] - The audit committee found no significant violations of limits and risk management policies during the year, affirming the effectiveness and adequacy of the risk management and internal control systems[146] - The company has established procedures for handling sensitive data to protect customer and supplier privacy, with no significant complaints regarding data breaches[195] Environmental, Social, and Governance (ESG) - The environmental, social, and governance (ESG) report covers the company's sustainable development performance for the period from January 1, 2021, to December 31, 2021[153] - The company is actively improving data collection methods for future reporting on environmental and social impacts[154] - The company has expanded into solar energy and will continue to seek opportunities in green energy business[155] - The board is responsible for overseeing the company's ESG initiatives and decision-making, with support from various departments[155] - The company recognizes the impact of climate change on operations and has developed a climate change policy to manage related risks[179] Employee and Community Engagement - The total number of employees as of December 31, 2021, was 93, with a diverse workforce across various demographics[184] - The company provided training hours totaling 1,461 in 2021, compared to 2,017 in 2020, indicating a focus on employee development despite a decrease in external training[188] - The company reported zero work-related injuries or fatalities during the reporting period[190] - The company has actively participated in community investment, providing scholarships to outstanding students since 2015[196] Sustainability and Resource Management - Total water consumption in 2021 was 34,202 cubic meters, an increase from 24,710 cubic meters in 2020[171] - Total electricity consumption increased from 620,455 kWh in 2020 to 726,604 kWh in 2021, an increase of about 17.1%[176] - The total greenhouse gas emissions rose from 388 tons CO2 equivalent in 2020 to 450 tons CO2 equivalent in 2021, an increase of approximately 15.9%[176] - The company has implemented various energy-saving measures, including the installation of LED lighting and regular energy audits to enhance operational efficiency[175] - The company has established strict guidelines for the handling of hazardous waste, ensuring proper disposal through licensed waste management services[172]
海峡石油化工(00852) - 2021 - 年度财报