Financial Performance - The group's revenue for the year ended December 31, 2022, was HKD 209.3 million, representing a 1.0% increase from HKD 207.2 million in 2021[11]. - Gross profit increased by 8.0% to HKD 70.6 million, with a gross margin of 33.7%, up from 31.5% in the previous year[11]. - Net profit decreased significantly by 77.0% to HKD 1.0 million, with earnings per share dropping to HKD 0.3 from HKD 1.1[11]. - Profit attributable to equity holders was approximately HKD 1.0 million, a decrease of about 77.0% year-on-year, primarily due to competitive pricing during the COVID-19 pandemic and one-off bonuses paid to employees[15]. - The company reported a distributable reserve of HKD 141.0 million as of December 31, 2022, unchanged from the previous year[86]. Operational Challenges - The ongoing COVID-19 pandemic continues to pose challenges, affecting public health and business operations globally[12]. - The company is closely monitoring the impact of COVID-19 on its financial condition and operational performance[73]. - The ongoing travel restrictions have significantly affected the company's ability to meet with customers and suppliers[74]. - The company faces uncertainties due to the ongoing U.S.-China trade tensions, which may adversely impact sales demand[75]. - Labor shortages and rising labor costs in China may hinder the company's expansion plans and operational efficiency[76]. Strategic Focus - The company is focusing on innovative product creation and expanding its business into new regions, particularly targeting Gen Z and millennials through e-commerce solutions[12]. - The company is exploring diversification opportunities in markets such as China, Europe, and ASEAN, as well as sustainable materials[6]. - The company’s management discussion and analysis section outlines future business development plans, indicating a focus on expanding product offerings and market reach[64]. Corporate Governance - The board consists of six directors, including three executive directors and three independent non-executive directors, maintaining compliance with GEM listing rules[143]. - The independent non-executive directors confirmed their independence status throughout the year, adhering to GEM listing rules[148]. - The company has adopted a code of conduct for securities trading by directors and employees, ensuring compliance with GEM listing rules[140]. - The chairman and CEO roles are separated, with the chairman responsible for effective board leadership and the CEO overseeing daily operations[146]. - The board is responsible for the company's performance and business oversight, with executive directors managing daily operations[145]. Risk Management - The company has implemented a risk management and internal control system, which is reviewed annually for effectiveness[191]. - Amba Partners Corporate Services Limited was engaged to assess the adequacy and effectiveness of the group's risk management and internal control procedures[192]. - The audit committee reported no significant discrepancies in the risk management processes and provided recommendations for improvement[192]. - The company has established a whistleblowing policy to prevent corruption and bribery, with an internal reporting channel for employees[191]. Employee Relations - The company values its employees as its most valuable asset, providing a competitive compensation package and effective performance evaluation systems[71]. - As of December 31, 2022, the total employee cost was approximately HKD 28.6 million, an increase from approximately HKD 26.0 million the previous year, mainly due to one-off bonuses[32]. - The senior management team has a gender diversity ratio of 41% female and 59% male, while overall employee gender ratio stands at 74% female and 26% male[185]. Shareholder Engagement - The board acknowledges the unwavering support and trust from shareholders and expresses gratitude to the management team and employees for their efforts during the year[7]. - The company did not recommend a final dividend for the year, consistent with the previous year[79]. - The annual general meeting is scheduled for May 12, 2023, with a suspension of share transfer registration from May 8 to May 12, 2023[132][133]. Auditor and Compliance - The company appointed a new auditor, Lo & Kwong CPA Limited, effective October 12, 2022, to fill the vacancy left by the resignation of PwC[37]. - The external auditor, RSM Hong Kong, was engaged for an annual audit service fee of HKD 690,000, deemed reasonable by the audit committee[200]. - The company has taken out liability insurance for its directors and senior management to provide adequate protection[101]. Supplier and Customer Relations - The company emphasizes maintaining long-term relationships with major clients, including retailers and beauty product brand owners, to ensure competitive pricing and quality service[68]. - The company has a strict supplier selection system to ensure material quality and consistency in product quality, requiring suppliers to comply with relevant local and industry quality control standards[70]. - The largest customer contributed 51.3% of total sales, with the top five customers together accounting for 82.5%[90].
德宝集团控股(08436) - 2022 - 年度财报