Euro Tech(US:CLWT)2023-05-11 16:00Acquisitions and Investments - The company acquired a 58% equity interest in Pact and Yixing, which are engaged in water and waste-water treatment solutions, and launched a ballast water port solution system in 2020[190]. - Blue Sky, in which the company holds a 19.4% equity interest, contributed US$413,000 in income in Fiscal 2022, up from US$355,000 in Fiscal 2021[193]. - The company is exploring strategic partnerships and funding opportunities to support product development and acquisitions[223]. Revenue and Financial Performance - For the fiscal year 2022, the company's total revenue decreased by 30.1% to approximately US$14,949,000, following a 60.1% increase to US$21,388,000 in fiscal year 2021[248]. - The company's net income for fiscal year 2022 was US$369,000, a decrease of 62.6% from US$989,000 in fiscal year 2021[248]. - Revenue from scientific instruments accounted for approximately 52.6%, 65.9%, and 58.8% of total revenues in Fiscal 2022, 2021, and 2020 respectively[225]. - Revenue decreased by $6,439,000 or 30.1% to $14,949,000 in Fiscal 2022 from $21,388,000 in Fiscal 2021, primarily due to the adverse impacts of the COVID-19 pandemic and Shanghai's lockdown[253]. - Gross profit decreased by $1,077,000 or 18.9% to $4,618,000 for Fiscal 2022 compared to $5,695,000 for Fiscal 2021, with cost of revenues at $10,331,000 or 69.1% of revenues[254]. COVID-19 Impact - The company faced significant revenue impacts due to COVID-19, with operations materially affected in 2020, but reported no significant disruptions in 2021[198]. - The company experienced a significant impact from COVID-19, particularly in fiscal year 2022, but has seen a gradual recovery since January 2023[249]. - The Chinese government has lifted COVID-19 restrictions starting January 2023, which is expected to reduce operational risks moving forward[200]. Regulatory and Compliance - The company is closely monitoring regulatory developments regarding potential CSRC approvals for overseas listings, with no current inquiries or sanctions received[204]. - The company has not been involved in any cybersecurity reviews or investigations as of the date of the report, indicating compliance with current regulations[207]. - The company is subject to various regulatory changes in China, which could materially affect its operations and demand for services[250]. Research and Development - The company incurred research and development costs of $493,000 in 2020 and $61,000 in 2021 related to the Ballast Water Treatment System (BWTS) compliance[213]. - The company incurred research and development costs of $61,000 in 2021 and $497,000 in 2020, while no costs were reported for 2022[277]. Market and Product Development - The company plans to promote its ballast water port solution system in Southeast Asia, targeting markets participating in the Belt and Road Initiative[211][220]. - The company has developed a handheld ballast water checker, the first of its kind made in China, and is promoting it to ship owners and service providers[233]. - The company has received type approval certificates for its BWTS from Lloyds and RINA, expanding its market coverage[222]. Employee and Executive Compensation - T.C. Leung, the Chairman of the Board, received a yearly salary of US$236,000 for Fiscal 2022[310]. - David YL Leung, the Chief Executive Officer, received an annual salary of US$300,000 for Fiscal 2022[310]. - Jerry Wong, the Chief Financial Officer, received a yearly salary of US$135,000 for Fiscal 2022[310]. - The total contributions of the Group to pension plans and retirement benefit schemes during the year ended December 31, 2022, amounted to US$302,000[314]. Shareholder and Dividend Information - The company's Board of Directors does not currently intend to declare any cash dividends in the foreseeable future, opting instead to retain earnings for business operations[8]. - The company declared a special cash dividend of US$1,299,000.78 on March 6, 2020, and subsequent dividends of US$1,030,951.80 on June 17, 2021, and US$463,927.92 on May 31, 2022[8]. - As of May 10, 2023, the company has 18 shareholders of record and 363 beneficial owners of its Ordinary Shares held in nominee names[9]. Taxation and Financial Obligations - The company's subsidiary in Hong Kong is subject to a profits tax rate of 8.25% on assessable profits up to US$256,000 and 16.5% on profits exceeding that amount[368]. - Euro Tech Trading (Shanghai) Limited, a subsidiary, had an assessable loss carried forward of US$103,000 as of December 31, 2022, which can offset future profits[369]. - The company has not experienced any significant changes since the date of its audited consolidated financial statements[348].