Financial Performance - For the fiscal year ending October 31, 2022, the environmental products business generated revenue of HKD 65,250,000, a decrease of 25% compared to HKD 87,268,000 in the previous year[8]. - The water supply business recorded revenue of HKD 32,345,000, an increase of 3% from HKD 31,252,000 in the previous year, due to supplying processed water to nearby rural areas[8]. - The group's total gross profit for the year was HKD 31,318,000, down 9% from HKD 34,328,000 in the previous year, with a gross profit margin of 32%, up from 29%[8]. - The profit attributable to the owners of the company was HKD 4,379,000, compared to HKD 5,062,000 in the previous year[9]. - The total revenue for the year ended October 31, 2022, was HKD 97,595,000, a decrease of 18% compared to HKD 118,520,000 for the previous year[26]. - The environmental products business revenue decreased by 25% from HKD 87,268,000 to HKD 65,250,000 due to a downturn in the industrial market in China[28]. - The water treatment business revenue increased by 3% from HKD 31,252,000 to HKD 32,345,000, attributed to supplying processed water to rural areas near Tianjin[28]. - The group's revenue for the year ended October 31, 2022, was HKD 97,595,000, a decrease of 18% compared to HKD 118,520,000 for the previous year[28]. - Basic and diluted earnings per share decreased to HKD 0.67 from HKD 0.78, a decline of 14.1%[170]. Business Segments - The environmental products business accounted for 67% of total revenue, while the water supply business accounted for 33%[8]. - The environmental products and water supply businesses accounted for 67% and 33% of total revenue, respectively, compared to 74% and 26% in the previous year[26]. - The company anticipates optimistic prospects for its environmental products business, particularly in the ship machinery and clean energy sectors[27]. - Revenue from the water treatment business has grown from approximately 2% in 2007 to about 33% in 2022, indicating a significant expansion in this segment[116]. Environmental and Sustainability Initiatives - The company is focusing on responsible waste management policies to reduce landfill burden and has begun replacing old fossil fuel vehicles with electric ones[9]. - The company has made efforts to monitor greenhouse gas emissions and waste generated during operations, emphasizing environmental management[9]. - The company adheres to environmental policies aimed at minimizing operational impacts and complying with applicable environmental regulations[141]. - The company has implemented multiple measures to reduce wastewater and sludge emissions from its water treatment operations, aligning with environmental regulations in China[142]. - The company has established its own wastewater and sludge sedimentation tanks for recycling and proper disposal, contributing to environmental sustainability[142]. - The company relocated its headquarters and main operational sites to energy-efficient offices, utilizing energy-saving equipment and LED lighting[142]. Governance and Board Structure - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring independence and diverse expertise[46]. - The company has adopted a board diversity policy since August 2013, emphasizing the importance of diversity in enhancing company performance[50]. - The board diversity policy includes measurable targets based on gender, age, ethnicity, knowledge, and tenure, ensuring a balanced composition[51]. - The nomination committee reviews the board's diversity annually to ensure the effectiveness of the diversity policy[53]. - The company has established a Nomination Committee to review the structure, size, and composition of the board, ensuring alignment with corporate strategy and diversity[76]. - The Remuneration Committee has reviewed the compensation of directors and senior management, deeming it fair and reasonable based on comparable companies and performance[75]. - An Environmental, Social, and Governance (ESG) Committee was formed in January 2022 to advise the board on managing ESG-related matters[77]. - The company has a policy for the appointment and re-election of directors, ensuring independent non-executive directors handle conflicts of interest[67]. Risk Management and Internal Controls - The board confirmed its responsibility for overseeing the group's risk management and internal control systems, which are reviewed at least annually[84]. - The group has established a clear organizational structure with defined responsibilities and reporting procedures for risk management[84]. - An external independent risk consultant conducts annual reviews of the internal control systems, ensuring their effectiveness and adequacy[88]. - The audit committee and board believe that the risk management and internal control systems are fundamentally effective and adequate[88]. - The company has not established an internal audit team but relies on external consultants for internal control reviews due to cost considerations[88]. Financial Position and Liabilities - The group's current assets net value as of October 31, 2022, was approximately HKD 34,020,000, compared to HKD 33,672,000 the previous year, with a current ratio of 1.68[32]. - The debt-to-equity ratio as of October 31, 2022, was approximately 14%, up from 12% the previous year[34]. - Total employee costs for the year were approximately HKD 17,267,000, an increase from HKD 15,767,000 the previous year, due to an increase in personnel[39]. - The total equity attributable to owners decreased from HKD 116,238,000 to HKD 107,678,000, a decline of approximately 7.4%[173]. - The company’s total liabilities decreased from HKD 9,899,000 to HKD 14,334,000, an increase of approximately 44.5%[172]. Shareholder Information - The company will hold its annual general meeting on March 30, 2023, with a suspension of share transfer registration from March 27 to March 30, 2023[104]. - The company has confirmed that it maintains the required public float as per GEM listing rules[150]. - The company’s major related party transactions for the fiscal year ending October 31, 2022, are disclosed in the financial statements[111]. - Sales to the top five customers accounted for approximately 31% of total sales for the year, up from 25% in the previous year, with the largest customer contributing about 7%[113]. - Purchases from the top five suppliers represented approximately 82% of total purchases, an increase from 78% in the previous year, with the largest supplier accounting for about 38%[118]. Accounting and Financial Reporting - The company’s financial statements for the year ending October 31, 2022, were prepared in accordance with Hong Kong Financial Reporting Standards[99]. - The independent auditor has issued an opinion that the consolidated financial statements fairly reflect the company's financial position as of October 31, 2022[155]. - The company has adopted new and revised Hong Kong Financial Reporting Standards, effective from November 1, 2021, which did not have a significant impact on the group's performance and financial position[183]. - The company is currently evaluating the potential impact of newly announced accounting standards[194]. - The financial statements are prepared based on historical cost principles, with estimates and assumptions that may differ from actual results[196].
环康集团(08169) - 2022 - 年度财报