Financial Performance - For the fiscal year ending December 31, 2022, the company reported a loss of HKD 2,363,000, compared to a profit of HKD 721,000 for the fiscal year ending December 31, 2021[24]. - Revenue decreased by approximately 6.3% year-on-year, attributed to factors including the depreciation of the Renminbi against the Hong Kong Dollar and delays in product delivery due to the COVID-19 pandemic[24]. - Other income from the sale of waste materials and components decreased from HKD 2,393,000 in the previous year to HKD 1,960,000 in the current year[24]. - Revenue from the tobacco flavoring and machinery construction contracts reached HKD 55,551,000, accounting for 80.4% of total revenue, up from 50.6% in the previous year[25]. - Gross profit margin decreased to 37.0% from 38.4% year-on-year, with the gross profit from tobacco flavoring machinery contracts at HKD 18,313,000, compared to HKD 15,380,000 last year[26]. - Operating expenses decreased by HKD 1,790,000 or 6.8%, totaling HKD 24,452,000, with a reduction in sales and distribution costs by 15.4% to HKD 7,797,000[31]. - Other income decreased by HKD 879,000 or 32.1%, totaling HKD 1,858,000, with bank interest income at HKD 1,230,000, down from HKD 1,666,000 last year[30]. - The average contract value for completed tobacco flavoring machinery contracts was HKD 2,222,000, down from HKD 2,665,000 in the previous year[27]. - Research and development costs slightly decreased by HKD 184,000 or 4.1%, totaling HKD 4,324,000[31]. - Tax expenses were recorded at HKD 1,775,000, down from HKD 2,647,000 last year, with no excess tax provisions recorded this year[32]. - The company did not recommend a dividend for the year ending December 31, 2022, consistent with the previous year[33]. Corporate Governance - The board of directors underwent changes, with new appointments made on June 30, 2022[4]. - The company has adopted all code provisions of the Corporate Governance Code, except for the separation of roles between the Chairman and CEO[106]. - The roles of Chairman and CEO are held by the same individual, Liu Li, which is noted as a deviation from best practices[121]. - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a diverse range of expertise[108]. - All independent non-executive directors confirmed their independence through annual declarations, and the board assessed their independence as compliant with listing rules[120]. - The audit report for the year ended December 31, 2022, was conducted by Deloitte, and a resolution will be proposed at the annual general meeting to reappoint them[102]. - The audit committee held five meetings to review the quarterly, interim, and annual performance of the group[128]. - The remuneration committee conducted two meetings to review the compensation packages for directors and senior management[132]. - The nomination committee held two meetings to review the board's structure and composition[130]. - The company has established mechanisms to ensure independent viewpoints within the board, with at least three independent non-executive directors[134]. - The company emphasizes high standards of corporate governance and business ethics for the long-term interests of shareholders[105]. Risk Management and Internal Controls - The board is responsible for establishing and maintaining an effective risk management and internal control system to protect shareholders' interests and prevent unauthorized use of assets[142]. - The company has conducted a review of its risk management and internal control systems for the fiscal year ending December 31, 2022, and reported the results to the audit committee and the board[143]. - The company has a three-year rotation plan for internal monitoring reviews, covering revenue, expenses, human resources, payroll, inventory, fixed assets, and treasury[143]. - The audit committee is responsible for reviewing the company's financial controls and risk management systems[128]. Employee and Labor Practices - Total number of employees increased from 134 in FY2021 to 142 in FY2022, representing a growth of approximately 5.97%[182]. - Employee turnover rate decreased from 15.6% in FY2021 to 10.64% in FY2022, indicating improved employee retention[186]. - The proportion of female employees was 80% in FY2022, slightly down from 82% in FY2021[182]. - The company strictly adheres to labor laws and reported no cases of child or forced labor during the reporting period[199]. - The company provides a safe working environment and complies with national safety regulations, with no reported work-related fatalities[194]. - Employee turnover rates by age group showed that the turnover for employees under 30 years was 23.6% in FY2022, down from 18.4% in FY2021[190]. - The company emphasizes the importance of employee health and safety as a key asset for sustainable development[194]. Environmental Sustainability - The company is committed to sustainable development, focusing on creating long-term value for stakeholders and minimizing environmental and social impacts[160]. - In the fiscal year 2022, the company emitted a total of 399.5 tons of CO2 equivalent greenhouse gases, a decrease of 27.5% from 550.9 tons in the fiscal year 2021[171]. - The company consumed 281,000 kWh of electricity in the fiscal year 2022, resulting in emissions of 167.3 tons of CO2 equivalent, slightly down from 168.7 tons in the fiscal year 2021[175]. - Water consumption increased to approximately 38,980 tons in the fiscal year 2022, compared to 34,651 tons in the fiscal year 2021[175]. - The company reduced the use of wooden pallets for product packaging by 13,862 kg, resulting in a total consumption of 23,074 kg during the reporting period[175]. - The annual emission density was recorded at 0.017 tons of CO2 equivalent per square meter, down from 0.024 tons in the fiscal year 2021, with a total building area of 23,223 square meters[171]. - The company has implemented measures to improve energy, water, and material usage efficiency to mitigate the adverse effects of greenhouse gas emissions and wastewater discharge[168]. - The company has not faced any claims or fines related to environmental damage during the reporting period[176]. - The board meets at least twice a year to oversee climate-related strategies and policies[177]. - The company encourages employee participation in green workshops to enhance environmental awareness[177]. Business Strategy and Operations - The company emphasized the importance of quality control and cost-effectiveness strategies for future operations[6]. - The management is committed to actively participating in contract bidding activities to enhance business opportunities[6]. - The company aims to continue sustainable development to deliver higher value to shareholders and stakeholders[6]. - The company is focused on research and development of new systems and enhancing safety control measures in production facilities[6]. - The company anticipates that rising sales costs will be a major obstacle affecting performance in the coming years[37]. - The company is focusing on enhancing production scheduling to improve efficiency between supply and production[38].
仁恒实业控股(03628) - 2022 - 年度财报