Financial Performance - For the fiscal year 2022, the company's revenue decreased by 17.7% to HKD 101.1 million from HKD 122.8 million in 2021[11]. - The gross profit margin fell from 28.3% in 2021 to 17.5% in 2022 due to reduced demand for the company's products[11]. - The company recorded a net loss of HKD 11.0 million for 2022, an improvement from a net loss of HKD 32.5 million in 2021[11]. - The company's revenue decreased by HKD 21.686 million or 17.7% from HKD 122.786 million in 2021 to HKD 101.100 million in 2022, primarily due to reduced demand for functional knitted fabrics[20]. - Gross profit fell by HKD 17.039 million or 49.1% from HKD 34.692 million in 2021 to HKD 17.653 million in 2022, with gross margin declining approximately 10.8 percentage points to about 17.5%[22]. - Other income decreased by HKD 929,000 or 24.5% from HKD 3.793 million in 2021 to HKD 2.864 million in 2022, mainly due to reduced government subsidies[23]. - A loss of approximately HKD 6.296 million was recognized for impairment of leased machinery due to uncertainty in future rental income[27]. - Administrative and other expenses increased by HKD 832,000 or 4.6% to HKD 19.073 million in 2022, primarily due to salary increases and enhanced employee welfare initiatives[26]. - Financing costs decreased by HKD 350,000 or 20% to HKD 1,412,000 in the fiscal year 2022, due to a reduction in bank borrowings[29]. - Income tax expense increased by HKD 256,000 or 64.3% to HKD 654,000 in the fiscal year 2022, primarily due to the recognition of deferred tax assets[30]. - Loss attributable to owners for the fiscal year 2022 was HKD 11,025,000, a decrease from HKD 32,503,000 in the fiscal year 2021[31]. Assets and Cash Flow - Total assets for 2022 were HKD 178.7 million, down from HKD 209.3 million in 2021[10]. - Current assets decreased to HKD 157.2 million in 2022 from HKD 176.3 million in 2021[10]. - The company's cash and cash equivalents at the end of 2022 were HKD 84.8 million, down from HKD 89.7 million at the end of 2021[10]. - Operating cash flow for 2022 was HKD 9.8 million, a decrease from HKD 30.8 million in 2021[10]. - The company’s non-current assets decreased to HKD 21.5 million in 2022 from HKD 33.0 million in 2021[10]. - Net cash generated from operating activities for fiscal year 2022 was approximately HKD 9,815,000, down from HKD 30,775,000 in fiscal year 2021[32]. - Cash and cash equivalents as of December 31, 2022, were HKD 87,057,000, compared to HKD 89,740,000 as of December 31, 2021[33]. Market and Strategic Outlook - The company plans to continue monitoring market conditions and adjust its strategies accordingly to improve performance in the upcoming fiscal year[11]. - Management expects demand for the company's products to rebound significantly in the second half of 2023 following the adjustment of COVID-19 policies by the Chinese government[16]. - The company aims to strengthen its market position in China by diversifying product offerings and enhancing marketing efforts[17]. - The company plans to continue investing in R&D for functional knitted fabrics and dyeing methods to enhance competitiveness[17]. - The company aims to strengthen its position in R&D of functional fabrics while expanding into different markets and increasing promotional efforts to attract new customers[142]. Governance and Compliance - The management team is committed to maintaining high standards of business ethics and corporate governance across all operations[71]. - The company emphasizes the importance of corporate culture in achieving its vision and strategy[69]. - The company has implemented anti-corruption policies and reporting mechanisms to enhance internal fairness[71]. - The company is focused on long-term, stable, and sustainable growth while considering environmental, social, and governance factors[72]. - The board consists of 2 executive directors, 1 non-executive director, and 3 independent non-executive directors, ensuring a balance of skills and experience[76]. - The board has delegated daily management and operations to executive directors, with regular reviews of assigned functions[74]. - The company has arranged appropriate liability insurance for all directors and senior officers, which is reviewed regularly by the board[74]. - The company is committed to ensuring transparency and accountability in its operations[74]. - The board confirmed their responsibility for the preparation of the financial statements for the year ended December 31, 2022[111]. - The company has adopted internal control policies regarding insider information disclosure and has not been aware of any violations of the securities trading code or insider information policies during the reporting period[113]. - The board believes that the risk management functions and internal control systems are effective and adequate as of the fiscal year 2022[117]. - The board and audit committee are responsible for evaluating and ensuring the implementation of effective risk management and internal control systems[120]. Risk Management - The company has established procedures for identifying, assessing, and managing significant risks, including regular reporting to the board[125]. - The risk management system categorizes risks into low, medium, and high risk, and strategies for handling these risks are determined accordingly[128]. - The audit committee regularly reviews the group's performance, risk management, and internal control systems to ensure effective measures are in place to safeguard significant assets[127]. - The company has engaged external consultants for internal reviews in certain areas to maintain adequate risk management and internal control[115]. - The board has not identified any significant issues during the annual review of the risk management and internal control systems for the year ended December 31, 2022[127]. Shareholder Communication - The company will hold its 2023 Annual General Meeting on May 25, 2023, to enhance communication with shareholders[129]. - The company emphasizes the importance of transparent and timely disclosure of information to facilitate informed investment decisions by shareholders[129]. - The company encourages shareholders to attend the Annual General Meeting and will ensure that directors are available to respond to shareholder inquiries[129]. - The company has established a communication platform on its website to provide shareholders with access to financial information and governance practices[129]. - The board has confirmed the effectiveness of its communication policy and will continue to review it annually[137]. Employee Relations - The company emphasizes the importance of maintaining good relationships with employees, suppliers, customers, and other stakeholders to achieve immediate and long-term goals[154]. - The company provides competitive compensation packages to employees, including basic salaries, housing, and performance bonuses, to retain skilled and qualified personnel[156]. - The group has a performance review system that is conducted at least annually to assess employee performance and improvement areas[172]. - There were no significant disputes with employees, suppliers, customers, or other stakeholders during the year ended December 31, 2022[154]. - The group contributes to a defined contribution plan for its Chinese employees, including retirement, medical, unemployment, maternity, and work injury insurance[173]. Board Structure and Diversity - The board has a diversity policy to ensure a balanced skill set and diverse perspectives among its members[97]. - The board currently has no female directors and aims to achieve gender diversity by December 31, 2024[100]. - The nomination committee is responsible for developing and executing policies regarding the nomination of board candidates, considering factors such as age, skills, and diversity[97]. - The nomination committee held two meetings in the year ending December 31, 2022, to review and recommend changes to the board's diversity policy and structure[101]. - The board's diversity policy was revised to include specific goals and timelines for achieving gender diversity within the board and workforce[101]. Related Party Transactions - The consulting service agreement with Proudy Limited, owned by a non-executive director, was renewed for an additional two years, with consulting fees of HKD 120,000 for the fiscal year 2022[180]. - The group had no disclosed share option or share incentive plans for the fiscal years ending December 31, 2021, and December 31, 2022[175]. - The group made no purchases from the related party, Zhongshan Dayong Yarn Factory, in the fiscal year 2022, compared to HKD 12,000 in the fiscal year 2021[177]. - There were no significant transactions or contracts involving directors or related entities that were active at the end of the fiscal year 2022[182]. Compliance with Regulations - The company complied with all relevant environmental laws and regulations during the fiscal year ending December 31, 2022[198]. - The board regularly reviews and monitors compliance with applicable laws and regulations[199]. - No directors or major shareholders had interests in any competing businesses during the fiscal year ending December 31, 2022[192].
智云国际控股(08521) - 2022 - 年度财报