Financial Performance - In 2022, the total revenue of the company was approximately RMB 628.0 million, a decrease of 12.1% compared to RMB 715.0 million in 2021[96]. - Revenue from sales of plate denitration catalysts increased by 50.9% to approximately RMB 519.5 million in 2022, driven by market demand fluctuations[97]. - Revenue from sales of honeycomb denitration catalysts decreased by 47.5% to approximately RMB 95.5 million in 2022, primarily due to market demand fluctuations and logistical issues caused by the pandemic[98]. - The company recorded a gross profit of approximately RMB 134.0 million in 2022, an increase from RMB 122.0 million in 2021, attributed to increased production of honeycomb denitration catalysts[100]. - The company’s loss attributable to owners increased by 91.1% to approximately RMB 235.0 million in 2022, compared to RMB 123.0 million in 2021[104]. - Sales and marketing expenses rose to 25.2% of total contract revenue in 2022, up from 18.6% in 2021, due to increased product marketing efforts[101]. - Administrative expenses decreased by 13.4% to approximately RMB 175.0 million in 2022, mainly due to reduced intermediary fees[102]. - The current ratio decreased from 2.4 times as of December 31, 2021, to 2.1 times as of December 31, 2022, while the quick ratio fell from 1.3 times to 0.8 times during the same period[108]. - As of December 31, 2022, the net current assets were approximately RMB 139.2 million, down from RMB 151.7 million in 2021, with cash and cash equivalents at approximately RMB 24.0 million compared to RMB 71.4 million in 2021[110]. - The company recorded no return on equity or return on total assets for the years ended December 31, 2021, and December 31, 2022, due to losses attributable to the owners of the company[109]. - The company had no outstanding bank loans or other borrowings as of December 31, 2021, and December 31, 2022[117]. - Capital expenditures for the year ended December 31, 2022, amounted to approximately RMB 2.4 million, a decrease from RMB 6.1 million in 2021, funded by internal resources[120]. - As of December 31, 2022, the company had approximately RMB 26.1 million of unutilized net proceeds from its initial public offering, which will be applied according to the prospectus[114]. Market Strategy and Operations - The group plans to enhance R&D for new denitrification catalysts in 2023, targeting emerging demands in various industrial sectors[12]. - The group aims to expand its overseas market presence and improve sales performance through an incentivized compensation system for market personnel[12]. - Cost control measures will be implemented in 2023 to ensure better cash flow and reduce personnel costs[12]. - The group will continue to strengthen the development of new technologies for industrial catalysts in 2023[11]. - The company plans to enhance market promotion efforts in 2023 through various channels to increase brand awareness[88]. - In 2023, the company aims to strengthen market expansion efforts both domestically and internationally, focusing on building a sales team familiar with international market rules[88]. - The company continues to communicate regularly with institutional investors and analysts regarding its strategies and plans[72]. - The company is committed to providing clear and accessible information to shareholders and stakeholders through various communication channels[71]. Governance and Board Structure - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring strong independence[24]. - All independent non-executive directors have confirmed their independence according to the listing rules, providing a robust governance structure[27]. - The company has established various formal and informal channels for independent non-executive directors to express their views confidentially, enhancing decision-making efficiency[28]. - All directors participated in appropriate continuous professional development programs in 2022 to update their knowledge and skills[29]. - The roles of the chairman and the chief executive officer are held by the same person, Zhao Shu, to provide strong and stable leadership during the current development phase[30]. - The company’s nomination committee is responsible for reviewing the board composition and monitoring the appointment and succession planning of directors[34]. - The company has a three-year service contract with all executive directors, allowing termination with a three-month written notice[34]. - The board will review its structure and composition periodically to maintain high standards of corporate governance[33]. - At each annual general meeting, one-third of the directors must retire, ensuring regular rotation and accountability[35]. - The company emphasizes the importance of independent opinions in board decisions, with three independent non-executive directors providing checks and balances[25]. - The audit committee held three meetings during the reporting period to review financial performance, compliance procedures, and risk management systems[38]. - The remuneration committee conducted one meeting to review the existing remuneration of all directors and senior management[41]. - The company’s external auditors were paid HKD 700,000 for audit services during the year ended December 31, 2022[50]. - The company has established a risk management framework that includes risk identification, assessment, treatment, reporting, and monitoring[52]. - The company’s governance policies and practices are reviewed annually to ensure compliance with legal and regulatory requirements[37]. - The nomination committee evaluated the independence of independent non-executive directors and reviewed measurable diversity goals[46]. - The company aims to have at least one female director and at least one-third of the board as independent non-executive directors[48]. - The audit committee is composed of three independent non-executive directors, ensuring effective oversight of financial reporting and internal controls[38]. - The company’s financial statements for the year ended December 31, 2022, were audited by the audit committee[39]. - The remuneration committee provides recommendations on the remuneration policies for all directors and senior management[41]. - The company engaged external internal control audit functions to save costs and ensure the effectiveness of its internal control system, covering financial, operational, compliance, and risk management controls[53]. - The audit committee and board confirmed that the risk management and internal control systems are adequate and effective, complying with corporate governance codes[53]. - No significant fraud or misconduct events affecting the financial statements or overall operations were reported for the year ending December 31, 2022[56]. - The company has adopted a whistleblowing policy to maintain transparency and accountability, which is reviewed annually by the audit committee[56]. - The board diversity policy aims to ensure a balanced mix of skills, experience, and perspectives, with annual reviews to maintain effective corporate governance[59]. - The board currently includes two female directors, achieving gender diversity, and plans to enhance female representation in senior management roles[60]. - The company regularly reviews and updates its anti-corruption policies to comply with applicable laws and regulations[58]. - The company provides compliance training to senior management and employees to foster a healthy corporate culture and enhance compliance awareness[57]. - The company has established procedures for shareholders to request special general meetings, ensuring transparency in governance[65]. - The company’s joint company secretary has undergone relevant professional training to ensure compliance with applicable rules and regulations[62]. Environmental and Social Responsibility - The company has established an environmental protection and responsibility system in compliance with Chinese environmental laws and regulations[132]. - The company’s business operations are subject to various environmental, health, and safety laws and regulations, requiring environmental impact assessments and the implementation of control measures[132]. - The company’s compliance procedures ensure adherence to applicable laws and regulations that significantly impact its operations[135]. - The board is responsible for the group's environmental, social, and governance (ESG) strategies and reporting[174]. Shareholder and Capital Management - The company did not recommend a final dividend for the year ending December 31, 2022, compared to no dividend in the previous year[141]. - The board will review the dividend policy periodically and may update it as deemed appropriate[149]. - The maximum number of shares available for issuance under the share option plan is capped at 49,403,700 shares, representing 10% of the total shares as of the report date[151]. - Any unexercised options that may be issued cannot exceed 30% of the total issued shares at any time[152]. - The total number of options granted to each eligible participant within any twelve-month period cannot exceed 1% of the issued shares as of the grant date[153]. - The exercise price for any specific share option must be determined by the board and cannot be lower than the higher of the closing price on the grant date or the average closing price over the preceding five trading days[154]. - The share option plan is valid for ten years from October 14, 2015, with approximately two years and seven months remaining[158]. - No options were granted, exercised, cancelled, or lapsed under the share option plan during the reporting period[159]. - As of December 31, 2022, the company had a total of 494,037,000 shares issued[170]. - Zhao Shuh, as a beneficial owner, holds 24,612,477 shares, representing approximately 4.98% of the total shares[169]. - Zhao Shuh also has controlled corporation interests amounting to 153,031,609 shares, which is approximately 30.98%[170]. - Li Xingwu holds 51,075,015 shares through EEC Technology Limited, representing approximately 10.34%[170]. - Li Ke has controlled corporation interests of 2,962,474 shares, which is approximately 0.60%[170]. - The company has not entered into any management contracts during the reporting period[178]. - There were no significant contracts established between the company's controlling shareholders and the group during the reporting period[180]. - The company has a mandatory provident fund scheme operating in Hong Kong and participates in a social security plan in China[168]. - The company has maintained the public float as required by the listing rules as of the report date[190]. - The audit committee, consisting of three independent non-executive directors, reviewed the audited financial statements for the year ended December 31, 2022[192]. - The company appointed a new auditor, Sannong CPA Limited, on November 18, 2022, following the resignation of the previous auditor[194].
迪诺斯环保(01452) - 2022 - 年度财报