Financial Performance - The company experienced a significant negative impact on its financial performance due to the COVID-19 pandemic, leading to a decrease in demand for waste management services [9]. - The company reported a loss attributable to equity shareholders of HKD 27,600,000 for the fiscal year 2022, an increase of HKD 3,700,000 or 15.4% compared to the previous fiscal year [40]. - Revenue from the CMDS (Confidential Materials Destruction Services) segment decreased to approximately HKD 15,900,000, representing a decline of 22.0% [46]. - The company’s gross profit for the fiscal year 2022 was HKD 25,200,000, a decrease of HKD 3,900,000 or 13.5% compared to the previous year, while the gross profit margin increased from 56.7% to 59.7% [59]. - The company’s operating segment performance showed a decline in profit of HKD 6,129,000 or 43.8% compared to the previous fiscal year [40]. - The company’s logistics service revenue decreased by HKD 5,000,000 or 53.0%, primarily due to lower collection rates for waste electrical and electronic products [54]. - The group recorded a loss before interest, tax, depreciation, and amortization of HKD 7,100,000 for the fiscal year 2022, compared to a loss of HKD 1,000,000 in the fiscal year 2021, with HKD 7,900,000 attributed to government subsidies received [61]. - The group recorded a net foreign exchange gain of HKD 2,000,000 for the fiscal year 2022, up from HKD 1,200,000 in the previous year, primarily due to the appreciation of the Renminbi [63]. Business Operations - The recycling business for paper benefited from rising product prices, while sales of household paper increased due to enhanced marketing efforts [9]. - The collection of discarded electrical and electronic products remained stable, driven by a government consumption voucher scheme encouraging consumers to purchase new appliances [9]. - Losses in the plastic waste recycling segment were significantly reduced due to adjustments in the scope of operations as an OEM service provider [9]. - The hazardous waste treatment business in China was adversely affected by local pandemic measures, but growth is expected once production and business activities normalize [9]. - The company anticipates a gradual recovery in its business and is committed to providing long-term value to shareholders [10]. - The company will continue to monitor regulatory developments related to waste recycling and reduction to align its services and explore new revenue opportunities [10]. - The company has invested in a hazardous waste treatment project in Lianyungang, Jiangsu Province, which commenced full production in March 2022, with a second phase expected to start operations in 2023 [36]. - The company’s joint venture in mainland China for hazardous waste treatment is expected to become a major profit contributor due to favorable environmental policies [56]. - The company’s revenue from the sale of other waste materials increased by 105.9% to HKD 70,000 [42]. Corporate Governance - The company has committed to maintaining high levels of corporate governance and has adhered to the principles and code provisions of the corporate governance code throughout the financial year ended March 31, 2022 [161]. - The board regularly reviews the corporate governance code and has established various policies focusing on risk management, internal communication, and internal control mechanisms [161]. - The audit committee consists of three independent non-executive directors and two non-executive directors, and has reviewed the audited consolidated financial statements for the year ended March 31, 2022 [156]. - The company has established four standing board committees: Executive Committee, Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific areas of business [185]. - The company has a robust internal control system to ensure effective risk management and compliance with relevant regulations [190]. - The audit committee is responsible for reviewing financial statements and reports before submission to the board, ensuring compliance with accounting standards [190]. - The company has established formal and transparent procedures for determining the remuneration of directors, with the human resources department managing relevant data [198]. Shareholder Information - As of March 31, 2022, the company's distributable reserves amounted to approximately HKD 420,290,000, a slight decrease from HKD 421,412,000 in the previous year [97]. - The board does not recommend a dividend for the year ending March 31, 2022, consistent with the previous year where no dividend was declared [93]. - Major shareholders as of March 31, 2022, include Cheng Yu Tung Family (Holdings) Limited, holding 2,742,514,028 shares, representing 56.86% of the issued share capital [132]. - Chow Tai Fook Capital Limited also holds 2,742,514,028 shares, equivalent to 56.86% of the issued share capital, indicating significant control by related entities [132]. - Victory Day Investments Limited and Smart On Resources Ltd. collectively hold 732,550,000 shares, representing 15.19% of the issued share capital [132]. - The company confirmed that it has sufficient public float, with shares held by the public exceeding 25% of the total issued shares [153]. Management and Directors - Mr. Zeng Anye has over 20 years of experience in international capital markets and previously served as Managing Director at Deutsche Bank in Hong Kong [19]. - Mr. Li Zhixuan has over 15 years of professional experience in corporate finance, investment, and asset management, and is currently Senior Vice President at Chow Tai Fook Enterprises [23]. - Mr. Zhou Shaorong is an independent non-executive director and has been with the company since October 2013, holding a law degree and extensive experience in legal and corporate governance [26]. - Mr. Huang Wenzong has over 30 years of experience in auditing, taxation, and corporate restructuring, and is a senior member of multiple accounting associations [27]. - Mr. Chen Dingbang has a rich background in corporate strategy and planning, with experience in various industries and has been with the company since May 2018 [31]. - As of March 31, 2022, the compensation policy for directors and senior management is linked to the group's financial performance and individual performance [113]. - As of March 31, 2022, directors and senior management hold approximately 0.31% of the company's shares, with individual holdings of 15,000,000 shares each for four directors [118]. Employee and Stakeholder Engagement - The group is committed to environmental sustainability and has integrated ESG considerations into daily operations, aligning with customer demands for increased waste recycling [70]. - The group has established communication channels with stakeholders to understand the impact of its operations on decision-making processes [76]. - The group emphasizes the importance of employee safety and adheres to occupational health and safety regulations, with a focus on training and development programs [77]. - The company has adopted a whistleblowing policy for employees, customers, suppliers, and other stakeholders to report suspected misconduct confidentially [197]. Audit and Compliance - The audit committee held two meetings with external auditors without the presence of executive directors or senior management [197]. - The committee reviewed the external audit scope, audit plan, and auditor fees [194]. - The company is considering appointing an internal auditor to enhance its internal audit capabilities [194]. - The audit committee's findings and recommendations were reported to the board for further action [197].
综合环保集团(00923) - 2022 - 年度财报